What is Credit Repair?

Achieving a good credit score is a major life goal for most of us, mainly because our credit reports and scores play such a huge part in our financial decisions and opportunities.

Acquiring a loan with a good interest rate, a reasonable insurance rate, and even landing a good job are highly influenced by what’s seen on our credit reports.

What to do if you have a low credit score? (bad credit)

In this economy where housing prices are skyrocketing and interest rates raising, it’s more important than ever to get control over your credit score.

This is where credit repair comes in. Credit repair is the method of correcting inaccurate, unverifiable, outdated, and obsolete information from a consumer credit report.

Repairing your credit report starts with questioning erroneous data with the credit bureaus. There are also more complex situations that require credit repair works such as identity theft and fixing the damage to your credit score from this.

An often forgotten and neglected aspect of credit repair is financial education and credit rebuilding. Once you have taken the time to fix the errors, understanding how your credit is calculated will help you maintain that high credit score we are all after.

What does Credit Repair do?

Credit repair gives you the chance to dispute and correct false information on your credit report which is also decreasing your credit score.

In-accurate information that is typically fixed thru credit repair include:

1. Missed payments that you paid on time, but are reporting as late. 2. Wrong account statuses, like an account that’s reported as “Settled in Full” instead of “Paid in Full.” 3. Obsolete information, since information can only stay on your credit report for a given period.

Every credit bureau (Equifax, Experian, and TransUnion) keeps its own copyrighted version of your credit report. The credit bureaus do their best to maintain accurate information, but errors and mistakes can still occur and can be left uncorrected if they are not disputed.

The Fair Credit Reporting Act (FCRA) allows you to file a dispute whenever you disagree with any information that is shown on your credit report. If the information cannot be confirmed as accurate within 30-45 days, the credit bureau should delete the item you disputed on your credit report.

Credit repair is usually done by a third party, oftentimes called a credit services organization. It is a legal service at the federal level and in many US states. Enacted in 1996, the federal Credit Repair Organizations (CROA) Act defines what a credit repair organization is and how it should operate.

A credit repair company helps their clients improve their credit report by trying to have inaccurate information removed from their credit reports in exchange for payment.

The process includes contacting the credit reporting agencies and disputing erroneous or false information on your credit record, then requesting for it to be removed. Reaching out to the credit bureaus, collection agencies and creditors to dispute errors that they find. They then keep track and follow-up on those disputes to ensure they’re being investigated properly,

Consumers can do credit repair on their own, but it is a tedious and time-consuming process that individuals would rather seek help from credit repair professionals who have a lot of experience in dealing with the credit reporting agencies.

Having bad credit is expensive. By having these errors removed, you can increase your credit score with each successful dispute. With a higher credit score, more financial opportunities will be made available to you.

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