Having a good credit score is important. Without it, you may be denied low-interest loans and lines of credit, a job, a rent, and even an insurance policy. If your credit report shows a history of debt problems or contains errors, you may consider using a repair service to “clean up” it. However, before you pay, know how these companies work.
In the vast majority of cases, hiring an external company will only waste your money. Legitimate credit repair companies can ensure that inaccurate information is removed from your credit reports so that it doesn't hurt your credit rating. However, they can't do anything for you that you can't do for you if you're willing to put in time and effort. Time, cost and complexity will determine whether it is worth hiring a credit repair service or dealing with a dispute yourself.
If you have already identified one or two problems in your report, such as an account with an incorrect balance or incorrect personal information, you may be able to fix them on your own. If your credit report is plagued by errors due to unforeseen circumstances such as identity theft and you simply don't have time to fix it, you may want to consider looking for a credit repair service. The first is that if the information that the credit repair service is disputing is correct, they will report it again the next time they send data to the agencies. Finally, you must obtain new accounts or make some credit limit increase requests to increase your available credit.
It's also a good idea to go and repair credit with as much self-knowledge as possible so that you can understand a little bit what's going on with your report. One of the agencies that oversees the industry is the Consumer Financial Protection Bureau (CFPB), a federal organization that protects consumers from fraudulent or abusive practices by banks, lenders or any type of financial institution, including credit repair companies. Credit repair companies can investigate such information, but so can the person who evaluates the report. So, while advertising from credit repair companies may have been somewhat softened, most still require a binding contract.
The Credit Repair Organizations Act requires companies to provide you with a firm total of costs and an estimate of how long it will take to get results. The federal government has long recognized that one of the biggest problems in the credit repair business were the outrageous claims they made in marketing their services, their high initial fees, and their lack of success in delivering the promised results to the public. As a result, I advise individuals planning to apply for a loan, mortgage or other major credit commitment to allow at least three to six months to review and correct any errors in their credit reports. For those of my readers who have more money than time and usually hire others to do what they could do themselves, there are other issues besides the cost for them to stop before hiring a credit repair company.
The company's software uses artificial intelligence to analyze its credit reports in search of negative elements that are reducing its credit rating. Equifax, Experian and TransUnion, the three credit reporting agencies, have a process to allow individuals to dispute credit report information. A number of companies claiming to make credit repairs have emerged over time, and while some may provide services that can help consumers, the real results of their efforts may be questioned. .