Honestly over the last 15 years, I have gotten this question from friends, family members, and random strangers, and it's really a loaded question. The funny thing is that over the last decade my answer and the way I respond to this question have evolved, and I feel the way I explain it now is entirely different and a lot more helpful to people.
Credit repair, to me, is a process that is one of the most underutilized but very effective processes to helping people improve their credit score. What do I mean by this? Well, there are actual consumer protection laws in place that allow you, the consumer, to contest the validity of each and every account on your credit report. This means it gives you the right to ask any data furnisher (creditor or collection agency) with whom you have current or previous debt liabilities to provide VALID proof that this account is not only accurately reporting to your credit report but that the actual debt itself is valid. Most people think that just because the debt is in their name that its Accurate and valid and this is just so far from the truth.
Let me give you a scenario. What if the employee responsible for reporting to the Credit Reporting Agency types in the wrong amount of a payment you made, or better yet forgets to report specific info to your credit report? Accidents happen right? Well what if this error happened in last year and was never corrected? The issue is just that, if its not corrected and the error compounds incorrectly thic ould mean you are paying an incorrect balance, the “Past Due Balance†on your report could be wrong, or even more the interest your being charged on the loan could be invalid.
This situation happens…. All… the… time… Literally I see it almost daily with my clients.
So credit repair, in essence, is a process where you can dispute an item on your credit report using different delivery methods like mail, phone, and fax to request a Data furnisher or Credit Reporting Agency to verify or validate an account.Again, in order to be able for Credit Repair to be done effectively and efficiently you need to understand more about the credit reporting laws to ensure your best success with the process.
What is the best credit repair process?
I write all my articles and blogs based on 15 years of experience in the credit repair industry. I put alot of effort into all my writing, so I really hope everyone can see my transparency. When it comes to the Best Credit Repair Process the simple answer is thats debatable and the only way you can determine whats considered the best, you have to do enough research to see what process applies to you the best.
There are truly two ways of doing credit repair:1. Send out dispute letters on your own
2. Use an online Dispute tool or Software
3. Hire a credit repair company
Ill explain both in detail.
Send out dispute letters on your own
I will be the first to tell you that if you do not have time set aside to learn about the credit repair process and research the important laws that are available to help you achieve the best results, I recommend you not do credit repair disputes on your own. Credit Repair can typically take 3-5 months on average to complete and its will consume 1-3 hours of your time minimal each month. If you decide you do not have the patience and time to learn and mail out disputes then I recommend you look into hiring a Credit Repair company which I explain in the next section.
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 Collections 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 to approach each negative account on your credit report correctly and come up with the best approach on how to dispute the accounts.
Once you do your research and due diligence on the laws, you want to create your own dispute letters to send out. 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 into the credit bureaus before. 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 off your credit report immediately.As a pro tip, I recommend that you always send your dispute letters 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. 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 a big No No. What most people find out the hard way is when you dispute online in general you actually sign off your rights 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 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.
I would avoid ever doing any online dispute if your truly looking to get the best results from your credit disputes.
Hiring a credit repair company
Since I actually have been in the Credit Repair Industry for a long time I can tell you first hand the pros and cons of hiring a credit repair company. Just like most industries there are good and bad apples 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 resultsRemember when you hire any company in any industry you 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.
- Hand 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 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 some one 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 ResultsJust like with anything that isnt Guaranteed you will run the risk of not getting any results and paying money essentially for nothing. Credit Repair is never guaranteed so its important you know what your getting from the credit repair company before you hire them. Ask very thorough questions and also see if they provide a money back guarantee.
- ScamI have been in the industry a long time and have ran a very successful company because of the standards and mission statement that I live by daily. Unfortunately 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 having any recourse. Due your due diligence, ask the company to provide a copy of their license as well as find out who 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 its 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 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 duedilligence and research.
Who is credit repair for?
Anyone who has any type of negative item on their credit report should consider credit repair. Remember its your legal right to dispute any item on your credit report and even if the account itself is legally your responsibility doesnt mean there isnt an error on your credit report.
I have worked with personally over 22,000 clients in 10 years and I have seen so many people go through life with an account on their credit report that was invalid or inaccurate and pay high interest rates because they thought that credit repair was only for accounts that were not theirs. So many companies offer a Free credit consultation and they can at least look over your credit report to identify if there are errors or discrepancies on your credit report.
I learned this simple fact the hard way when I was young, but it has helped me see credit in general differently. A Credit score has little to nothing to do with your ability to be approved for a loan but instead its your credibility that determines this and your score determines the tier in which your Interest rate will be. How cool is that? Most people think that their credit score is the secret code to getting approved for a loan when in reality its actually what is on your credit report. For instance I had a client who had credit scores in the high 700s across the board and he called me and said he was turned down for a loan. You may not know this by a 720+ credit score qualifies you for the best interest rates on most loans and we found out really quickly he was turned down due to credit inquiries. Although it sounds crazy, but most lenders do not want to see high and recent credit inquiries because it passes suspicion that they may have already been approved for the same loan but with another company.
Moral of the Story… pull your credit report online at leas tevery quarter and if you have any derogatory remark on your credit report you should dispute it.
Why is Credit Repair Necessary
If you saw just one tenth of the credit reports I have seen over the years you would quickly understand why credit repair is necessary. Not only is it necessary in order to be able to take out a loan in the future, it also is necessary to help you stop bad habits early from causing you financial pain forever.
I have always said this to all my clients. “Credit Repair is only one tool of many to help you fix credit issues.†Credit Repair cant solve your financial concerns. Repairing your credit can help you remove derogatory debt off your credit report which can positively help your credit score. It also can help you remove the liability from a debt that is not legally yours. Again though, credit repair is only a tool to help you fix your credit and its necessary in order to make sure you do not pay compounding amounts of interest for the rest of your life.
Having bad credit can make it impossible to do the following:Get a Job
Get Insurance
Get Approved for a Home or Car Loan
Get Approved for a credit card
Get approved for renters insuranceGet approved by utility and phone companies
Keep you from saving money and growing your wealth
People who start their journey early and work on their credit to increase their credit score typically have higher chances of retiring early and setting up their future generations for success. Its never too early to repair your credit so start now!
What type of Items can Credit Repair fix
Credit Repair can help you fix any data that is reported on a credit report. In fact its important that you always make sure that the things that are on your credit report especially within the personal information section of your credit report are accurate. Accessing a copy of your credit report and Identifying the inaccuracies, errors, and incomplete information on a credit report using a highlighter usually is the easiest way to do this.
Here are the most commonly disputed items on a credit report:
- Personal InformationMake sure that your name is spelt correctly, the only address that is reported is your current address, your Date of Birth is correct, and lastly that all your Employement history is removed.
- Negative AccountsAny negative account on your credit report such as a collection or charge off should be disputed.
- Negative Payment HistoryAny late payment history on any account should be disputed. Although older late payment accounts may not be affecting your credit score per say, the negative reporting can affect your future loan interest rates.
- Public RecordsThe only Public Record that appears on a credit report today is a Bankruptcy. Its important to dispute the Bankruptcy along with any account that was included in the Bankrutpcy
- Credit InquiriesCredit Inquries or most commonly called credit pulls is history of anyone who has accessed your credit report within the last two years. Outside of credit inquiries tied to open accounts, you should dispute all your credit inquiries to make sure they are indeed accurate and valid. You are only able to pull your credit six times a year per credit reporting bureau so keeping your credit inquiries low will keep them from impacting your overall credit score.
On a Final note!
Some of the most wealthy people on this planet use their credit to build wealth and the worst thing you can do is have bad credit to prevent you from building wealth. I truly believe that sometimes our own laziness keeps us from being proactive from taking intuitive on credit issues and our lack of knowledge keeps us from believing we can have an amazing credit score. Leave me a comment below and Id be happy to guide you through the process and advice you every step of the way. If you are looking for an amazing credit repair company to help you with your credit, check out my company ASAP Credit Repair, we are a nationwide family owned and operated credit repair business. We are fully licensed and bonded and we offer a money back guarantee on almost ever service we offer. If you just need some fee advice or a push in the right direction give us a call, we offer a Free consultation and evaluation. Check us out atwww.asapcreditrepairusa.com