The concept of credit repair is one that has become increasingly popular over the last 15 years. I've heard people ask about it, from family, friends, and even strangers. How I explain it has changed a lot over the past decade, and I feel my present response is more useful for people. Credit repair is a process that can be a great help in improving someone's credit score, but is often overlooked. By law, you can dispute any account on your credit report and ask the creditor or collection agency for proof that the account is correct and valid. It is not uncommon for errors to occur in the reporting of payments, past-due balances, and interest fees. If these mistakes are not fixed, they can have a negative effect on your credit score. Credit repair is a way to dispute these items and ask the credit reporting agency to validate them. In order to be successful with credit repair, one must understand the laws related to credit reporting.
Table of Contents
What is the most effective way to repair credit?For whom is credit repair beneficial?What are the reasons for needing Credit Repair?What sort of problems can Credit Repair address?
What is the most effective way to repair credit?
To effectively repair credit, take a proactive and disciplined approach. Begin by reviewing your credit report, disputing inaccuracies, and providing evidence. Create a realistic budget, prioritize timely payments, and focus on high-interest balances. Negotiate payment plans if needed and avoid unnecessary new credit. Improve existing credit by maintaining a low utilization ratio and keeping accounts open. Remember that credit repair requires time and effort, but perseverance will help rebuild your creditworthiness over time.
Send out dispute letters on your own
If you are considering doing credit repair on your own, I highly recommend you set aside the time to learn about the credit repair process and research the laws that are available to help you achieve the best results. Credit Repair can typically take 3-5 months on average to complete, and it will consume 1-3 hours of your time minimally each month. Before you can send out your own disputes, you need to understand the credit reporting regulations that are in the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA). Both outline what guidelines a Data Furnisher and/or Credit Reporting agency must follow in order to report your account information to your credit report. By doing your research and learning these laws, it will help you approach each negative account on your credit report correctly and come up with the best approach on how to dispute the accounts.When disputing, it's important that your 1st Dispute letter go out to the (3) major credit reporting agencies Equifax, Experian, and Transunion, and wait on their response before you send a dispute out to the data furnisher like the original creditor or a collection agency. The Credit Reporting agencies and data furnishers are required to respond to your disputes within 30 business days, or they must remove the account or reporting error from your credit report immediately. I always recommend that you send your dispute letters by certified mail so you have a provable time stamp that you can use in case you ever need to file a complaint or a lawsuit. Keep records of everything you do within the process.
Use an online Dispute tool or Software
Using an online dispute tool or submitting an online dispute with the three major credit reporting agencies is not recommended. When you dispute online in general, you actually sign off your rights to redispute any item on your credit report for an entire year. Most credit disputes aren’t resolved until after 2-4 rounds of disputes, so if you do not like the outcome of your first dispute, then you will not be able to rechallenge or redispute for an entire year.Also, I never recommend disputing online with any software or tool because the disputes that they provide are typically really generic and basic and they don’t allow you to dispute using any specific consumer protection law, which means your chances of getting good results is typically limited.
Hiring a credit repair company
When it comes to considering hiring a credit repair company, you should know the pros and cons of doing so. Just like most industries, there are good and bad companies, and you really need to make sure you do your due diligence before selecting the right credit repair company for you.
Pros of hiring a credit repair company
They have the expertise and experience to help you get resultsYou are paying for convenience and their expertise. If you find a really established company with a proven track record, it can be worth every penny.
Hands-off ExperienceYou typically will get to sit back and relax, meaning your involvement in the process is usually not necessary so you can focus on things in your life that are more important.Education Credit LearningA lot of credit repair companies will provide a credit consultation so they can provide you with information on exactly what all is affecting your credit score, along with things that you can do to improve it quickly.Help with complex situationsEvery credit report is different, and sometimes it will take someone who has dealt with certain circumstances to use their expertise to get some of the harder accounts removed.Save moneyOne of the ultimate goals most people have for the reason to fix their credit is to be able to use their credit to make purchases at a decent and low-interest rate. Credit issues can cost you thousands of dollars annually in fees, and so by just removing errors and increasing your credit score, you will save a lot in the long run.
Cons of hiring a credit repair company
No ResultsCredit Repair is never guaranteed so it's important you know what you're getting from the credit repair company before you hire them. Ask very thorough questions and also see if they provide a money-back guarantee.
ScamUnfortunately, there are a lot of fly-by-night companies in our industry that do not last long, and you could fall victim to someone taking your money, and you never have any recourse. Due to your due diligence, ask the company to provide a copy of their license as well as find out how long they have been in business.
ExpensiveSome credit repair companies are very affordable, but others can charge outrageous fees. A lot of people struggling with their credit usually are also struggling financially, so it's important if you do not have a lot of money to put towards credit repair that you shop around or try to do it on your own.Look, the amazing thing you have as an American is the power to choose and make decisions. Write down all your concerns when it comes to fixing your credit and pick a solution that fits you best. Never settle, and always do your due diligence and research.
For whom is credit repair beneficial?
Anyone who has any kind of damaging information on their credit report should consider credit repair. It is your legal right to challenge any item on your credit report, even if the account is legally yours. In my 10 years of helping over 22,000 clients, I have found that many people pay high-interest rates because they think credit repair is only for accounts that are not theirs. Many companies offer free credit consultations, so at the very least, they can review your credit report to identify any errors or discrepancies.I learned this lesson the hard way when I was younger. However, it has changed my understanding of credit. A credit score has little to do with loan approval; it is your credibility. Your score determines the tier in which your interest rate will be. Pretty cool, right? Most individuals think their credit score is the key to loan approval when in reality, it is what is on the credit report. I had a client who had credit scores in the high 700s and was still denied a loan. He was rejected due to the high number of recent credit inquiries. It may sound strange, but lenders often do not want to see multiple inquiries because it raises suspicion that the borrower may have already applied for the same loan with another lender.The conclusion is simple - review your credit report online at least every quarter and challenge any negative remarks.
What are the reasons for needing Credit Repair?
Seeing the sheer number of credit reports I have looked at over the years has made me a firm believer of why credit repair is necessary. It is not only a way of being able to get a loan in the future but also helps to cut off bad habits early and prevents them from resulting in financial woes for life.I have always reiterated to my clients that credit repair is just one of the many tools to fix credit issues. It cannot solve all of your financial problems, but it can help you get rid of negative debt in your credit report, which can eventually boost your scores. It also can help you remove the responsibility of debt that is not legally yours. Credit repair is an effective tool to help repair your credit, but it is necessary to prevent you from having to pay high-interest rates for a long period of time.Having a bad credit score can prevent you from getting a job, insurance, loan for home or car, credit cards, renters insurance, utility and phone services, and it can also keep you from saving money and money growth. Therefore, it is always better to start early and work on improving your credit score as it increases the chances of retiring early and setting up the future generations for success. So, start your credit repair journey today!
What sort of problems can Credit Repair address?
Credit Repair can help you address any inaccuracies, errors, or incomplete information on your credit report. By accessing a copy of your credit report and using a highlighter to identify the elements that need to be fixed, you can start the process of improving your credit score. The most commonly disputed items include personal information, negative accounts, negative payment history, public records, and credit inquiries. It is important to make sure that your name is spelled correctly, only your current address is reported, your date of birth is accurate, and all employment history is removed. Additionally, any negative accounts such as collections or charge offs should be disputed. When it comes to negative payment histories, any late payments should be disputed as this can affect future loan interest rates. Public records such as bankruptcies should be disputed along with any accounts included in the bankruptcy. Lastly, credit inquiries should be checked to make sure they are accurate and valid as they can impact your credit score if they are too high.
In conclusion
Having great credit is essential for financial success and unfortunately, many of us lack the knowledge and/or initiative to make sure our credit is in good standing. To get you on the path to improving your credit score and building wealth, I suggest reaching out to a credit repair company. If you are looking for an amazing credit repair company, check out my company ASAP Credit Repair. We are a nationwide family owned and operated credit repair business and we are fully licensed and bonded. Furthermore, we offer a money back guarantee on almost every service we offer and we also offer a Free consultation and evaluation. To learn more about us, visit our website at <a href="https://asapcreditrepairusa.shortcm.li/9a4hSz"></a>. If you have any questions or need advice, feel free to leave me a comment below and I’d be more than happy to help guide you every step of the way.