In the last 15 years, countless people have asked me about credit repair, and my response has changed significantly. Credit repair is a beneficial but underutilized way of improving one's credit score. This is made possible by consumer protection laws that allow you to contest the validity of any account on your credit report. This means you can ask data furnishers or collection agencies to prove that the account is accurately reported and that the actual debt is valid. It's not uncommon for mistakes to happen, such as wrong amounts being reported or even being forgotten altogether. Not correcting this can lead to an incorrect balance, a past due balance, or even an invalid interest rate.
Credit repair involves disputing an item on your credit report using different methods such as mail, fax, or phone. It is important to know the credit reporting laws to maximize success in the process.
Table of Contents
Which is the most effective credit repair method?
For whom is credit repair intended?
What is the importance of Credit Repair?
What types of things can Credit Repair address?
Which is the most effective credit repair method?
Dispute errors: If you find any errors on your credit reports, dispute them with the credit bureaus by providing supporting documentation and requesting their removal.
Send out dispute letters on your own
If you have the time and patience to devote to credit repair, sending dispute letters alone can be a great option. Credit Repair can typically take 3-5 months on average to complete, consuming 1-3 hours of your time each month. You need to understand the credit reporting regulations in the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA) before sending out your own disputes. This will help you approach each negative account on your credit report correctly and come up with the best approach to dispute the accounts.
I highly recommend you never use dispute template letters like the ones you can find online, but instead, use them to help you structure your letter. You want your dispute letter to be unique and not something that has been sent to the credit bureaus before. When disputing, it's important that your first dispute letter goes out to the three 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 must respond to your disputes within 30 business days or remove the account or reporting error from your credit report immediately.
It's also important to note that I recommend you always send your dispute letters by certified mail so you have a provable time stamp to use in case you ever need to file a complaint or a lawsuit. Always keep records of everything you do within the process.
Use an online Dispute tool or Software
Using an online dispute tool like Credit Karma or, better yet, submitting an online dispute with the three major credit reporting agencies is not recommended. What most people find out the hard way is when you generally dispute online, you sign off on your rights to redispute any item on your credit report for an entire year. Since most credit disputes aren’t resolved until after 2-4 rounds of disputes, if you do not like the outcome of your first dispute, 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 they provide are typically 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 are typically limited.
I will avoid ever doing any online dispute if you’re genuinely looking to get the best results from your credit disputes.
Hiring a credit repair company
Hiring a credit repair company is something you should consider if you do not have the time and/or patience to do the credit repair process on your own. Remember, when you hire any company in any industry, you pay for convenience and expertise. If you find an established company with a proven track record, it can be worth every penny.
You will typically 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. Many credit repair companies will provide a credit consultation to provide you with information on exactly what is affecting your credit score and what you can do to improve it quickly.
Every 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 more complicated accounts removed. One of the ultimate goals most people have for fixing their credit is 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, so remove errors and increase your credit score. You will save a lot in the long run.
However, there are some cons associated with hiring a credit repair company. Just like with anything that isn’t guaranteed, you risk not getting results and paying money for nothing. Credit Repair is never guaranteed, so it's important to know what you're getting from the credit repair company before you hire them. Ask thorough questions and see if they provide a money-back guarantee.
You also want to ensure you do not fall victim to a scam. I recommend you ask the company to provide a copy of their license and find out how long they have been in business. Some credit repair companies are affordable, but others charge outrageous fees.
Look, the amazing thing you have as an American is the power to choose and make decisions. Write down all your concerns about 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 intended?
It may be time to consider credit repair if you have any negative items on your credit report. It is your legal right to dispute any item you may find on your credit report, even though the account itself may be your responsibility. I have been working with clients for the past 10 years, and I have seen numerous people pay high-interest rates because they believed that credit repair was only for accounts that were not theirs. You can use many companies offering free credit consultations, allowing them to examine your credit report for errors or discrepancies.
I learned about this concept when I was younger, and it has helped me view credit through a different lens. A credit score does not determine if you are approved for a loan but rather your credibility. This score will determine the tier of your interest rate. But many people don't know that it is not the credit score that is the secret code to getting approved for a loan, but rather what is on your credit report. For instance, I once worked with a client whose credit score was in the high 700s, but they were still turned down for a loan. It turned out that the lender was suspicious of high and recent credit inquiries, which can be a red flag.
This story teaches us to check our credit report at least every quarter and, if there are any negative remarks, to dispute them. Credit repair is not only beneficial, but it is also your right.
What is the importance of Credit Repair?
Seeing the credit reports I have gone over in my years of working with clients, it is evident that credit repair is necessary. Not only does it help to ensure that you can take out a loan in the future, but it can also assist in preventing long-term financial damage. I have always emphasized to my clients that credit repair is only one of many tools they can use to fix their credit. It can help remove negative debt from your credit report, positively impacting your credit score. Additionally, credit repair can help remove legal liability from a debt that is not yours. However, it is important to remember that credit repair is just one tool used to fix credit and is necessary to prevent paying compounding amounts of interest for the rest of your life.
Having poor credit can make it difficult to:
- Get a job
- Obtain insurance
- Be approved for a home or car loan
- Be approved for a credit card
- Secure renters insurance
- Be approved by utility and phone companies
- Save money and grow wealth
Those who start their credit repair journey early and work to improve their credit score often have the opportunity to retire earlier and set their future generations up for success. It is never too soon to start repairing your credit, so begin today!
What types of things can Credit Repair address?
Credit Repair can help you address any inaccuracies, errors, or incomplete information reported on your credit report. Such items include personal information, negative accounts, payment histories, public records, and credit inquiries. It is important to check your credit report regularly and use a highlighter to identify and dispute any incorrect entries. Your personal information should be spelled correctly, only your current address should be reported, your date of birth must be accurate, and all employment history should be removed. Any negative accounts, such as collections and charge-offs, should be disputed. Any late payments should also be challenged, as these can affect future loan interest rates. Finally, ensure that all credit inquiries are valid and dispute any that are not to ensure that too many credit pulls do not impact your credit score.
To conclude
Having great credit is essential for building wealth, and the worst thing you can do is have bad credit prevent you from attaining financial success. It is possible to be proactive and make improvements to your credit score, yet our own laziness and lack of knowledge can stop us from doing so. If you are looking for help, I'd be more than happy to guide you through the process and provide advice every step of the way. For a professional credit repair service, consider my company, ASAP Credit Repair. We are a nationwide, family-owned and operated business, fully licensed and bonded, and offer a money-back guarantee on almost every service we provide. Plus, we offer a free consultation and evaluation, so if you just need some advice or a push in the right direction, don't hesitate to give us a call. To find out more, please visit our website at <a href="https://asapcreditrepairusa.shortcm.li/9a4hSz"></a>.