Bad credit can take hold of anyone’s financial life, whether due to financial missteps of the past or erroneous information reported by creditors. If you’ve had a late payment on a credit card, an account that found its way to a collection agency, or irresponsible use of credit accounts, your credit history shows a less-than-ideal picture of your financial character. Incorrect reporting of your accounts gives off the same negative vibe to entities that have access to your reports. Lenders, employers, and even insurance companies see these black marks on a credit report as a glaring red flag.
While a spotted credit report isn’t a life sentence, it can seriously impede your ability to move ahead with what you want in life. A new mortgage, a financed car, or even your dream career can all be put on hold thanks to financial blunders or errors found in your credit history. Although there isn’t a magic button you can push to wipe the slate clean, there are tactics you can implement to get back on the path of financial well-being via your credit history. One of these strategies is professional credit repair.
An Industry with a Reputation
Credit repair completed by an individual or agency on your behalf is a perfectly legal practice that can yield powerful results for your current and future financial circumstances. Through a credit repair company, errors – inaccurate negative information – are disputed in an effort to have them removed permanently from your credit report. For those who have pesky, incorrect entries on their credit reports that never seem to go away, a credit repair company can be a financial lifesaver. Unfortunately, credit repair as an industry has gained a less-than-perfect reputation among the masses. The negative light shed on credit repair companies can be linked to two unfortunate issues: misunderstanding what credit repair companies are able to provide, and fraudsters representing themselves as credit repair companies just to make a quick buck. To avoid the bad actors in credit repair, it’s important to have realistic expectations of what credit repairs companies can offer.
What Credit Repair Is
Under the Fair Credit Reporting Act or FCRA, every consumer has a certain set of rights as it relates to their credit report. First, credit reports from the three major credit reporting agencies – Equifax, TransUnion, and Experian – must be made available at no cost no less than once per year. This provision was included in the FCRA to allow individuals the ability to request inaccurate information be removed from reports in a timely fashion. Also within the FCRA, consumers have the right to dispute any entry that is incorrect, incomplete, or untimely, and disputes must be investigated within 30 days for credit agencies to comply with the law. While you can dispute erroneous information found in your credit report on your own, several people opt to have a third party – a credit repair company – take on this challenge for them.
It’s your right to request inaccurate data be removed, but it can be time-consuming and even a bit intimidating when you aren’t all that familiar with the FCRA or other pertinent laws. Credit repair companies manage the dispute process for you, after working with you to determine which information is inaccurate and gathering supporting documentation, if needed. A top-notch company also takes steps to scrub your credit report against other applicable laws, including the Fair Credit Billing Act, the Fair Debt Collection Practices Act, and any others that impact specific groups of consumers. Each of these credit repair tactics is completely legal, and ultimately, they work to your benefit. Credit repair companies do not, however, help you wipe the slate clean when the information dragging down your credit history and score is true and accurate, like a missed payment, a judgment against you, or a bankruptcy.
What It Isn’t
Thinking credit repair companies are your saving grace when it comes to cleaning up your credit will most likely lead you down a disappointing path. Only incorrect information listed on your credit report, or information that is well past its “expiration date” can be fixed with the help of a credit repair company. Fraudulent credit repair companies may claim to wipe your credit report clean, typically through a process known as segregating your credit file, but this is a farce. Similarly, some less than reputable credit repair companies may promise to fix your credit in a matter of days – this simply isn’t a reality when dealing with the dispute process through the credit reporting agencies.
It takes both time and patience to repair your credit the right way.
Any credit repair company that asks for a significant fee upfront, before doing any substantive work on your behalf, isn’t likely going to do much if any work for you. Unfortunately, the combination of these fraudulent or misleading aspects of some credit repair companies give the industry an unsavory reputation across the board. However, if you’ve determined that removing negative, inaccurate information from your credit report isn’t a challenge you are willing to go alone, employing the help of a professional, reputable company, or attorney, may be your best next step. Be sure to recognize what responsibilities you have in the process, and commit to working with your credit repair company to achieve optimal results regarding your credit report.
