Credit repair is a service that helps people who have a poor credit history or low credit score improve their credit report and increase their score. It usually involves disputing negative items on your report with the credit reporting agencies and making sure that they are removed from your report.
There are many companies offering credit repair services and many of them are legitimate. Choosing the right one can help you repair your credit and save you money.
Generally, credit repair companies aren’t the best option for everyone, but there are some who may find it beneficial to use them. They typically offer a variety of services, including budgeting and financial counseling, credit monitoring for continued accuracy and a plan to pay off debt.
If you have a low credit score, the result is that you might not be able to secure loans and credit cards at the lowest interest rates. This is why it’s important to understand your credit history and the steps you can take to rebuild your credit.
In order to start the process of credit repair, you need to order a copy of your credit report from each of the three credit reporting agencies, including Experian, Equifax and TransUnion. Once you receive your reports, review them for any inaccuracies or mistakes. If you spot any, dispute the information by sending a letter to the credit bureau and providing supporting documentation.
The credit bureau will investigate your dispute and let you know in writing if they find that the item was incorrect or not. If the item is deemed accurate, it will be deleted from your report and if it was not, it will be kept on file for future investigation.
You can also dispute inaccurate items on your own, but the process can be time-consuming and frustrating. This is why it is sometimes easier to enlist the help of a credit repair company.
There are a number of ways you can do this on your own, but the main way is to send a letter to each of the three credit bureaus disputing any errors or inaccuracies on your reports. Once you have the letters, make sure you follow up with the credit bureaus on a regular basis to make sure that your disputes are being investigated and addressed correctly.
A credit repair company will also review your credit report to identify any bankruptcies, charge-offs or tax liens that are negatively impacting your credit. They will then create a plan to dispute these items with the credit bureaus and negotiate them down or remove them from your report.
However, you should note that not all credit repair companies are created equal and some will be more expensive than others. In addition, you should check out their reputation online and read customer reviews before signing any contract.
You should also be aware that a credit repair company must provide a disclosure stating your rights to order your own credit report, dispute inaccurate information on your credit report and sue credit repair companies that violate CROA. This disclosure should be separate from any contract that the company offers. It should include a phone number, a physical address and a link to cancel your contract within three business days of signing.