Credit repair is a process that has been around for quite a while, but it's one of the most underutilized and powerful tools for helping people improve their credit scores. What do I mean by this? Consumer protection laws allow individuals to dispute the accuracy of every account listed on their credit report. This means the consumer is given the right to question any data furnisher (creditor or collection agency) with which they have a current or previous debt to provide concrete evidence that the account is accurately reported and the debt is valid. Many people assume that if their name is on the debt, then it's accurate and valid, but this is simply not the case.
Let's consider a scenario. What if the person who reported to the Credit Reporting Agency made a mistake and entered the wrong amount of a payment that was made or even omitted information from the report? It may sound unbelievable, but this happens all the time! I see it frequently with my clients.
Credit Repair involves disputing an item on the credit report through various delivery methods, such as mail, phone, or fax. This allows the individual to request that the data furnisher or Credit Reporting Agency verify or validate the account. To ensure the best possible outcome, it is essential to have a good understanding of the credit reporting laws.
Table of Contents
What is the most effective way to fix credit?
For whom is credit repair intended?
What is the importance of Credit Repair?
What sort of things can Credit Repair address?
What is the most effective way to fix credit?
The most effective way to fix credit involves proactive steps and responsible financial management. Firstly, obtain copies of your credit reports from the major credit bureaus and carefully review them for errors or discrepancies. If you identify any inaccuracies, dispute them with the respective credit bureau and provide supporting documentation. Next, pay off outstanding debts, particularly those in collections or with high-interest rates. Negotiating with creditors to settle debts or establishing payment plans can help. Consistently making timely payments is crucial, as payment history significantly impacts credit scores. Keeping credit card balances low and maintaining a low credit utilization ratio is also important. Aim to use no more than 30% of your available credit. Furthermore, refrain from rapidly opening multiple new credit accounts, as it can negatively impact credit. Instead, focus on building a positive credit mix by having various credit types. Seeking guidance from credit counseling agencies or credit repair companies can provide valuable insights and assistance throughout the credit repair journey. Ultimately, improving credit takes time and discipline, but by implementing these strategies consistently, you can gradually fix your credit and achieve a better financial standing.
Send out dispute letters on your own
If you decide to go the route of disputing on your own, you must learn about the credit repair process and research the laws that can help you achieve the best results. Doing your credit repair will likely take 3-5 months and a minimum of 1-3 hours each month. Dedicating yourself to this task could be daunting, so hiring a credit repair company may be wise, which I will explain in the next section.
You will also have to understand the regulations of the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA). This will help you approach each negative account on your credit report knowledgeable. When writing your dispute letters, templates may help you structure them, but make sure they are unique and not copied from a website. Your first dispute should be sent to the three major credit reporting agencies, Equifax, Experian, and Transunion, and wait for their response before disputing with the data furnisher, like the original creditor or a collection agency. The credit reporting agencies and data furnishers must respond to your disputes within 30 business days, or the account or reporting error must be removed from your credit report.
Remember to keep records of everything you do and always send your dispute letters by certified mail for a provable time stamp.
Using an online Dispute tool or Software
I do not recommend using an online dispute tool because the disputes are often generic and basic, not considering any specific consumer protection law. Submitting an online dispute with the three major credit reporting agencies is a big no-no because you sign off on your rights to redispute any item on your credit report for a year. Most credit disputes usually require 2-4 rounds of disputes, so if you do not like the outcome of your first dispute, you won’t have the chance to rechallenge or redispute.
Hiring a credit repair company
When considering hiring a credit repair company, do your due diligence to find the right one. Established companies with a proven track record may be worth the cost of convenience and expertise. You may also find that the company can provide a credit consultation and education on what is affecting your credit score and how you can improve it quickly. Furthermore, they can assist with complex situations that require expertise.
On the downside, there is the risk of not getting any results and paying money for essentially nothing. There is also the risk of scams, so be sure to ask the company for a copy of their license and how long they’ve been in business. Additionally, some credit repair companies can be expensive, so shop around for a price that suits you.
Remember, you have the power to choose and make decisions. Write down your concerns and find the best solution that fits you. Always do your due diligence and research.
For whom is credit repair intended?
Anyone who has any type of negative item on their credit report should consider credit repair. It is your legal right to dispute any item on your credit report, and even if the account itself is legally your responsibility doesn’t mean there isn’t an error on your credit report. I have been helping over 22,000 people in the last 10 years, and I have seen many people with an incorrect credit report account that pays high-interest rates because they thought credit repair was only for accounts that were not theirs. Fortunately, you can get a free credit consultation to identify if there are any mistakes or discrepancies on your credit report.
I learned this lesson the hard way when I was younger, but it has changed my perspective on credit. A credit score has little to do with whether you will be approved for a loan but rather your trustworthiness. However, your score will decide the tier of interest rate you will be given. Isn’t that awesome? Most people think that their credit score is the key to getting approved for a loan when it is what is on your credit report that matters. For example, I had a client with credit scores in the high 700s, but he was still rejected for a loan. You may not know this, but a 720+ credit score qualifies you for the best interest rates on most loans. We found out quickly he was denied due to credit inquiries. It may seem strange, but most lenders don’t like to see high and recent credit inquiries because it suggests the possibility that another company has already approved the loan.
Therefore, the moral of the story is to check your credit report online at least every quarter and dispute any derogatory remark on your credit report.
What is the importance of Credit Repair?
Seeing just a fraction of the credit reports I've reviewed over the years has convinced me of the necessity of credit repair. Not only do you need it to be eligible for future loans, but it is also a way to stop bad habits from indefinitely causing financial pain.
When I counsel my clients, I tell them that credit repair is only one of many tools to fix credit issues. Repairing credit can help you remove bad debt from your report, which could result in an improved score. It can also help you delete liability from a debt that isn't rightfully yours. However, credit repair is only a tool and must ensure you don't incur compounding interest for the remainder of your life.
Low credit can make it difficult to:
- Get a job
- Get insurance
- Get approved for a home or car loan
- Secure a credit card
- Get approved for renters' insurance
- Get approved by utility and phone companies
- Stop you from saving money and growing your wealth
Those who start working on their credit early and increase their score have a better chance of retiring earlier and setting their future generations up for success. It's never too soon to repair your credit, so start now!
What sort of things can Credit Repair address?
Credit Repair can help you fix any data reported on a credit report. It's essential to make sure the personal information reflected on your credit report is correct. Highlighting inaccuracies, errors, or incomplete information is the best way to do this.
The most commonly disputed items on a credit report are personal information, negative accounts, negative payment history, public records, and credit inquiries. Personal information should be up to date and accurately spelled. Negative accounts, such as collections or charge-offs, should be disputed. Negative payment history, including older late payments, can affect future loan interest rates, so it's important to dispute them. Today's only public record on a credit report is bankruptcy, and the related accounts should be challenged. Lastly, credit inquiries should be checked, and only six should be made per credit bureau in a year.
In conclusion
If your credit score prevents you from achieving financial success, it's time to take action. Don't let laziness or lack of knowledge stop you from building wealth. I'm here to help guide you through the process. If you're looking for a credit repair company to get you on the right track, check out my company ASAP Credit Repair. We are a nationwide family-owned and operated business with all the necessary licensing and bonds. Plus, we offer a money-back guarantee on almost every service and even a free consultation and evaluation. Visit us at <a href="https://asapcreditrepairusa.shortcm.li/9a4hSz"></a> to find out how we can help you get the credit score you deserve.