Credit repair services help you to improve your credit score and build a positive credit history. This is important because a good credit score can improve your ability to borrow money and get loans for things like a car or home. Many lenders rely on your credit score to make decisions about whether to approve you for a loan or not, and it can also affect your employment chances.
Credit reports contain information about your credit history, such as your payment history, how much you owe and how long you’ve been in credit. Your credit score is a three-digit number that’s calculated based on this information.
Your credit score is a key factor in deciding if you should apply for a mortgage, a credit card or a personal loan. It can also be used to determine the interest rate you will pay on your new loan.
If you are unsure about what’s wrong with your credit report or how to start fixing it, there are plenty of resources online that will walk you through the process. For example, the Consumer Financial Protection Bureau (CFPB) offers sample dispute letters that you can use to contest inaccurate information on your credit report.
A credit repair company will first review your report to identify the specific items that need to be disputed. Generally, they will look for late payments, charge-offs and collection accounts that have been reported incorrectly to the credit bureaus.
Once they have identified the negative information on your report, they will create a strategy for arguing that the erroneous information should be removed from your report. They will then reach out to the credit bureaus or the companies that have reported the erroneous information on your behalf.
Typically, disputing errors on your credit report can take a few months and require some legwork on your part. However, if you have the time to devote to it, it can be a fairly straightforward task that can significantly improve your credit.
In addition to helping you repair your credit, most credit repair companies can also provide you with tips for improving your budget and preventing other problems that could lead to negative marks on your report. For example, some companies can help you to avoid paying high interest rates on revolving credit accounts.
Some of these services charge a monthly fee, while others may offer different packages depending on how complex the credit issue is. Some even offer refund policies that cover their fees if they aren’t successful in repairing your credit.
If you decide to use a credit repair company, it’s best to ask a lot of questions before signing up. For instance, you should ask if you’re entitled to free credit reports or how much time the dispute process will take.
When you’re considering using a credit repair service, be sure to look for companies that have a solid reputation and customer reviews, are transparent about their policies and fees, and can answer your questions thoroughly.