Having a problem with your credit report can deal a blow to your finances. However, what if this particular, troublesome item in your credit report was a mistake?
Did you know that 1 in 5 Americans has an error on their credit report? It means that there are chances that you did not make that charge and you want that fixed. You could use some help from a repair company. The question is which company to go for?
The following details we have will help you understand how credit repair works and what to look for in a great credit repair company, should you choose to get their services.
What Is Credit Repair?
At first glance, Credit Repair would technically imply actions that that would help fix your bad credit in various ways possible. What the term implies when used is that it refers to disputing errors on credit reports.
Normally, this particular action is possible to do for free with each of the credit bureaus. Though the act itself leads to a formal dispute with the bureau via online means or by mail. With the necessary documentation backing up the detailed explanation about the formal report on the dispute, the credit bureau will take action and have that fixed.
The problem is most people may not have time or knowledge to take this on. This is where a repair company comes into the scene to help in getting these credit errors disputed.
How Does a Credit Repair Company Work?
How does this work? A credit repair agency has to get the information from all three credit bureaus. By setting them side by side, they will have these reports cross-referenced while being on a lookout for errors that may appear on one but not on the other two reports.
Once they find the errors, you’ll provide the repair company the supporting documentation that you may have or need. In the instance that you don’t have any supporting documentation, the repair company can aid you in securing them.
Upon receiving the dispute and supporting information, the bureaus and data furnishers will work together with the repair company to determine if they should remove the item in question.
After which, the credit agency will respond and resolve the dispute within 30 days (although there are instances that this stretches to 45 days).
What to Look for in Great Credit Repair Companies?
Now that we know how credit repair companies work, do note that there are repair companies that may scam you. To aid you in this, we have taken note of what you should keep an eye on.
The FTC mentioned the following things to keep an eye on to test the credibility of companies that fix credit reports. Be wary when you notice the following.
One is when the agency asks you to pay their credit repair service before they provide any of their services. The Credit Repair Organizations Act states that they cannot require you to pay until they complete the services they offered and promised.
If the company doesn’t tell you your rights or what you can do your free, that should be a red flag.
If the company doesn’t tell you to contact EquiFax, TransUnion, or Exprian directly, that is also a sign to be cautious.
Another to keep an eye on is when they tell you that they can get rid of wrong credit information in a report, even if the information is true and current. No one can remove accurate negative credit information on your credit report. You can, however, have it disputed and have it done in the proper channels.
Take a step back if the repair company suggests that you apply for another EIN (employer identification number) to make a “new” credit identity rather than using your Social Security Number. The result is by committing a federal crime by lying on a loan or credit application or misrepresenting your Social Security Number.
In the end, these situations can drive you into a scam where you have the same error on your credit report but at a loss with the money spent, or worse.
Look for These Factors Instead
To answer the question of what you should look for in a repair company, remember that they should help you understand and make the process easier. In this case, keep an eye out for these.
First and foremost, they know your rights and they want you to understand them. A good repair company rubs disputes against the laws provided to help you. Reputable credit repair companies explain your consumer rights to you and answer any questions about them.
They will also take note of every possible detail to understand why you want to dispute an item on your report.
With all those details noted, they will line the report up with the three standards for credit reports as mentioned by Lexington Law’s Consumer Education Specialist Randy Padawer: accuracy, fairness, and full substantiation. This way, they can see if the data furnishers and credit bureaus upheld and adhered to those standards.
Every dependable credit repair agency understands what they are capable of doing and what their limitations are. Thus, they explain to you what they can do to represent you to the credit bureaus.
Getting a repair company would have varying prices, depending on the contract and the rates agreed upon. However, remember that whatever a credit repair agency can do, you can also do it for Free.
A Quick Takeaway
To sum that up, here’s what you have to be aware of when choosing a repair company that is refutable:
- Can’t make false claims about their service
- Will charge you after completion of service
- Will help you understand your consumer rights
Now, it is also noted that you can also do the dispute process yourself, free of charge. The best times to contract the services of a credit repair agency are for legitimate errors, unverifiable errors, and if your lenders are willing to work with credit repair agencies.
Take Control of Your Finances!
Credit errors are among the problems that people face with their finances. By checking with the three credit bureaus and finding the errors that you can dispute, you can assure that you will be able to save money easily. This means that your credit score will also improve, helping you with loans and getting lower interest rates.
Did you find this article helpful? Looking for a reputable credit repair company that won’t scam you? We also have more tips and advice on credit repair and more, so feel free to get in touch with us.