Many consumers have errors on their credit report, which may result in higher-than-necessary rates for loans and insurance policies. But the good news is that these mistakes can often be corrected for free through a process established by the Fair Credit Reporting Act. Credit repair companies use this process to dispute inaccurate information on your behalf, and sometimes they even negotiate directly with creditors for negative marks to be removed from your credit reports.
Credit repair services check your credit reports from Experian, Equifax and TransUnion to identify items that are negatively affecting your credit score. They then send letters to the credit bureaus and your creditors requesting that inaccurate or outdated information be removed. Some credit repair companies also offer additional perks like educational materials, workshops and one-on-one advice.
When evaluating credit repair services, it’s important to compare upfront fees and monthly costs, as well as how many items each company disputes per month. Also be sure to research the company’s reputation and any lawsuits brought against it by the Federal Trade Commission or other consumer groups.
A reputable credit repair company should have a comprehensive list of services that can be customized to the unique needs of each client. The following are some common services offered:
Debt Validation: A reputable credit repair company should be able to demonstrate that an item on your report is inaccurate by providing proof of payment or other documentation. They may also be able to challenge the legality of a debt by questioning whether it meets certain legal standards, such as being reported in a timely manner or having been incurred within a reasonable amount of time.
Disputes with the Credit Bureaus: A credit repair company should be able to demonstrate their ability to dispute inaccurate information on your report with the credit bureaus by providing you with a copy of your report and a summary of your rights under state and federal law. They should also be able to provide you with examples of successful disputes.
Negative Items Removed: A reputable credit repair company should be capable of removing inaccuracies such as late payments, collections, foreclosures, liens and charge-offs from your report. They may also be able to help you resolve problems with medical bills, student loans and unpaid utility bills.
Does credit repair improve your score?: In most cases, repairing your credit will improve your score. That’s because your score considers the length of your credit history and the number of recent positive items in it. However, it’s not a guaranteed outcome.
Remember that a reputable credit repair company won’t guarantee they can remove accurate information from your report or make any promises about raising your credit score. These types of statements should raise a red flag and may be a sign that the credit repair company isn’t reputable. You can also improve your credit on your own by disputing inaccurate information and adopting responsible financial habits, as well as seeking out free or low-cost credit counseling from nonprofit organizations. credit report repair services