During your lifetime, you can lose some hundreds to thousands of dollars to a bad credit score; it will cost you some serious cash! Bad credit score means higher interest rates for a loan and higher insurance premiums that will mount over the years. Bad credits can stop you from achieving major life goals, like buying a house, taking a vacation, going back to school, or even retiring on schedule.
But what if there are errors on your credit reports, or debts appearing multiple times? Even a credit that’s decades old, perhaps? In such cases, you’ll have to pay unfair interests on your credit card, mortgage, and car loan. You can approach each of the credit bureaus and update your credits profile, but that’s a drawn-out process. Instead, you can hire a credit repair company for increasing your credit score.
All you need to know about credit repair
You can either repair your credits yourself, or hire credit repair companies to do it for you. Credit repair is the practice of fixing bad credit reports, and is as simple as fixing mistakes with the credit agencies. Extensive credit repair work may be required for major unfortunate events, like identity theft. But the general form of credit repair deals with fundamental financial concerns, like budgeting, updating profiles for loans, and much more.
A number of commerce firms claiming to do credit repairs have sprung up in recent years; some are genuine, while others are not. In many cases, legal and financial expertise may be needed to repair a bad credit score. Depending on the degree of the problem, it may involve simply cleaning up mistakes in the credit sheet or going for professional assistance.
How credit repair companies work
Credit repair leverages your legal right to three standards – must be accurate, entirely fair, and fully corroborated. If the entries on your credit report don’t meet these standards, you may want to consider hiring a credit repair company.
A good credit repair company will first collect your credit reports and pinpoint your credit issues. The credit reports will be collected from 3 or more credit reporting agencies. This is done because each report may have diverse credit entries, which might be present in one and missing in the other. Once these errors have been identified, you need to submit supporting documents that may be used to validate any erroneous credit entries.
Credit repair companies will then review your credits, and produce a sample of precise credit evaluation. It then directs the supporting information and disputes to the respective data furnishers or bureaus. They will in turn work with your credit repair company to determine the necessary changes to in your credit report.
Know your legal rights
No one can legally remove any negative information from a credit report. You can only request for an investigation – free of cost – on the erroneous information in your credit report. The Fair credit reporting Act connotes a few legal rights for the credit holder.
According to the law:
- If a company takes any adverse actions against you, like denying your credit application, employment, or insurance, you’re entitled to a FREE credit report.
- All nationwide credit reporting companies are authorized to provide you a free copy of your credit report once every year on request.
- You’re not billable if you dispute inaccuracies in your credit report.
You can fix your credit reports yourself. However, there’s no quick-fix solution. Negative information that’s accurate can’t be changed, and will continue to reflect in your credit report for 7-10 years. You can maintain a good credit report by knowing your credit utilization rate, checking your credit report frequently, and tracking all credit reports that you hold.