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Credit Repair

Credit Repair Companies

Credit repair companies and services are fraught with risk. Unless you know what to look for, you may fall victim to a scam and lose your money. Some companies even use or advocate illegal methods to repair your credit. If you have been the victim of a credit repair company, you can report them to the state law enforcement office and the Federal Trade Commission. States have laws against using illegal or deceptive practices to take advantage of the credit rating system. Repairing your credit won’t happen overnight. Any company that claims they can fix your credit overnight likely isn’t legitimate.

Request a Report

If you have been denied credit by an agency, you are entitled to a free credit report. When you get the denial letter in the mail, check the details to find out how to request your free report. If you want to repair your credit, the first step involves getting access to these reports to evaluate incorrect or negative items. You’ll need a report from each credit bureau since the three credit reporting agencies — Equifax, TransUnion, and Experian — may have different reports. If you are denied credit based on your credit report, you can request a free copy of your report directly from the credit bureau that provided the information within 60 days of the denial.

Identify Illegitimate Credit Repair Schemes

Several telltale signs help you to determine if a credit repair company uses illegal or deceptive methods to attempt to repair your credit. The Credit Repair Organizations Act prevents credit repair companies from asking for payment for services until they have completed those services. Walk away from any company that demands money up front. They may also advise against free options that you can do yourself to repair your credit, recommend against contacting the three major credit bureaus, or state that they can remove accurate or negative information. It’s true that sometimes a legitimate item can be removed in a dispute, but knowingly requesting the removal of accurate information is illegal. They also might advise you to create a new “credit identity” by using an EIN number instead of your social security number.

Identify Incorrect Information

Review your credit report and file a dispute in writing about anything that you feel is inaccurate. Some of the credit bureaus allow you to do this online through their website. However, it must be in writing and you should include a reason and any evidence to back up your claim, along with the dispute. Send your letter by certified mail and keep a copy of the return-receipt as well as a copy of the sent letter to back up your claim that you sent it. After an investigation that involves the original creditor, the credit card bureau will notify you of the results. If they determine the information is inaccurate, it’s deleted from your report. Information that is accurate will require you to provide additional documentation.

Working With a Reputable Credit Repair Agency

While many credit repair companies offer over-the-top solutions that are often illegal at worst and ill-advised at best, you can help ease the burden of repairing your credit by hiring companies to complete the dispute process for you. There are certain timelines to consider and you may have to file appeals and submit additional documentation to support your claims. Reputable repair companies review and obtain your credit reports for you and then identify incorrect or missing information. They can even list a reason on many credit bureaus files to explain why you have negative credit. If you were the victim of an accident, they can fill out the proper paperwork for you to notate that your poor credit was the result of a medical issue. Some lenders such as an apartment complex or employer may take these notations into account when deciding to issue credit, an apartment or a job. Additionally, a reputable credit repair company knows what kinds of things the credit bureaus are looking for in a dispute. If you dispute your report on yourself and get a refusal to remove the information, you won’t be able to dispute it again unless you have the right documentation. Credit repair agencies can help you avoid this in the first place and clean up any false or incorrect information on your report.

Check out these credit repair companies: