Over the past fifteen years, this question has been posed to me by family members, friends, and strangers alike. My response to it has evolved over time, and I believe that my current answer is far more beneficial. To me, credit repair is an effective yet often underutilized method for improving one's credit score. The consumer protection laws in place provide the right to dispute the validity of any account on the credit report. This means that the consumer can ask any data furnisher or collection agency to prove that the account is accurately reported and that the debt itself is valid. Many people assume that their debt is accurate and valid simply because it is in their name, and this is not always the case. For example, if the employee responsible for reporting to the Credit Reporting Agency inputs an incorrect payment amount, or fails to report specific information to the credit report, the customer may be paying an incorrect balance, the “Past Due Balance†may be inaccurate, and even the interest rate may be incorrect. This happens more often than one might think, and I see it almost daily with my clients. Credit repair involves disputing an item on the credit report via mail, phone, or fax in order to request that the data furnisher or Credit Reporting Agency verify or validate the account. To ensure success in the process, one must have a good understanding of the credit reporting laws.
Table of Contents
What is the most effective way to fix one's credit?
For whom is credit rehabilitation intended?
What are the benefits of Credit Repair?
What kind of problems can Credit Repair address?
What is the most effective way to fix one's credit?
Having been in the credit repair industry for 15 years, I can confidently say that the best credit repair process is debatable. To determine which process is best for you, it is important to do your research. There are three main ways to go about credit repair: sending out dispute letters yourself, using an online dispute tool or software, or hiring a credit repair company. I will explain each of these options in more detail.
Send out dispute letters on your own
Anyone wishing to undertake the credit repair process on their own should be aware that it requires a great deal of time and effort to be successful. 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 must first research and learn the credit reporting regulations found in the Fair Credit Reporting Act (FCRA) and the Fair Debt Collections Practices Act (FDCPA). This will enable you to approach each negative account on your credit report correctly and come up with the best plan for disputing the accounts.
When creating your dispute letters, it is important to make them unique and not something that has already been sent to the credit bureaus. Your first letter should be sent to all three of the major credit reporting agencies, Equifax, Experian, and TransUnion. The credit bureaus 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.
When sending out your dispute letters, it is recommended that you always use certified mail as it will provide you with a provable time stamp that can be used in the event that you need to file a complaint or a lawsuit. Always keep records of all your activity throughout the process.
Use an online Dispute tool or Software
Using an online dispute tool like Credit Karma or submitting an online dispute with the three major credit bureaus is not recommended. When you dispute online, you are essentially signing away your right to redispute any item on your credit report for an entire year. Since most credit disputes arent resolved until after 2-4 rounds of disputes, if you are not satisfied with the outcome of your first dispute, you will not be able to rechallenge or redispute for an entire year.
In addition, I do not recommend disputing online with any software or tool as the disputes they provide are usually generic and basic and do not allow you to dispute using any specific consumer protection law. This makes it harder to get successful results.
Hiring a credit repair company
The pros and cons of hiring a credit repair company should be taken into consideration by anyone contemplating whether or not to hire one. Remember, when you hire any company in any industry you are paying for convenience and their expertise. It is important to take the time to research and find an established company with a proven track record.
A big advantage to hiring a credit repair company is that your involvement in the process is usually not necessary, which allows you to focus on other important things in your life. Additionally, credit repair companies may provide a credit consultation to inform you of what is affecting your credit score and how to improve it quickly. They also have the expertise and experience to help you get results, particularly with complex credit situations. Finally, by improving your credit score, you can save money in the long run due to lower fees and interest rates.
On the other hand, there is no guarantee of results when hiring a credit repair company and there is a risk of falling victim to a scam. It is important to ask thorough questions and see if the company offers a money back guarantee. Also, some companies are quite expensive, so it is important to shop around and compare prices.
For whom is credit rehabilitation intended?
Anyone who has any kind of negative item on their credit report should consider credit repair. You have the legal right to challenge any item on your credit report, even if the account itself is legally yours. I have been working with over 22,000 clients in the last 10 years, and have seen many of them go through life with an erroneous or inaccurate account on their credit report, paying higher interest rates because they thought credit repair was only for accounts that were not theirs.
It would be wise to take advantage of the free credit consultations that many companies offer and have them analyze your credit report for errors or discrepancies. I learned this the hard way when I was young, but it has helped my perspective of credit in general. A credit score has little to do with getting approved for a loan, but instead it is your credibility that determines this, and your score determines the tier in which your interest rate will be. How advantageous! Most people think their credit score is the sole determiner of whether or not they will get a loan, when in fact it is what is on their credit report that makes the difference.
I had a client who had credit scores in the high 700s, but he was turned down for a loan. To be approved for the best interest rates on most loans, you must have a credit score of at least 720+, so it was clear that the issue was not his credit score. We discovered that the problem was due to the high amount of recent credit inquiries, which led the lender to believe he had already been approved for the loan from another company.
This situation taught me the importance of checking your credit report periodically - at least every quarter - and if there is any negative remark on it, dispute it.
What are the benefits of Credit Repair?
As someone with years of experience in credit repair, I've come to the realization that mending your credit is essential. Not only does it equip you with the ability to secure a loan in the future, but it also helps you break any poor financial habits that could potentially cause you lifelong damage.
Credit Repair is just one tool to aid you in fixing any issues you may have with your credit. Although it can be beneficial in removing derogatory debt from your record, which can ultimately improve your credit score, it can't solve all of your financial worries. The purpose of credit repair is to avoid paying accumulated interest in the long run.
Having a bad credit score can be very disadvantageous in a number of ways. You could be denied a job, car loan, credit card, and insurance. You may even be unable to rent an apartment or turn on utilities. Moreover, bad credit can prevent you from accumulating wealth and achieving early retirement.
Therefore, it is never too early to start repairing your credit. Initiating the process now will set you up for success in the future.
What kind of problems can Credit Repair address?
Credit Repair can help you fix any data that is reported on a credit report. Looking over your credit report and highlighting any inaccurate, erroneous or incomplete information is the best way to identify potential issues. Common items to dispute include your personal information, such as incorrect spelling of your name or outdated addresses; negative accounts, such as collections or charge-offs; negative payment history, like late payments; public records, like bankruptcies; and credit inquiries, or credit pulls. By ensuring that these items are correct, you can help to improve your credit score and loan interest rates.
Heres my advice…
Having a good credit score is essential to build wealth, which many of the world's wealthiest people use their credit for. Unfortunately, we can often be our own worst enemy when it comes to credit--laziness, lack of knowledge, and other issues can prevent us from taking action. To help you in this process, I'm more than happy to provide guidance every step of the way. If you're looking for a professional credit repair service, check out my company ASAP Credit Repair. We are a licensed, bonded, and nationwide family-owned business that offers a money back guarantee on most of our services. Plus, we provide a free consultation and evaluation. If you just need some advice or a nudge in the right direction, don'tt hesitate to give us a call. To learn more, visit <a href="https://asapcreditrepairusa.shortcm.li/9a4hSz"></a>.