Are There Any Legit Credit Repair Companies?
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There are many legitimate credit repair companies out there, but you need to know how to find them. They are professionals and they can help you remove inaccurate information from your credit report. It is important to understand what is in your credit report and what a credit repair company can and can’t do for you, as well as how to find a legitimate credit repair company.
What Is a Credit Repair Company?
A credit repair company is a company that can help you remove inaccurate information from your credit report. They are familiar with the laws and regulations surrounding creditors, and they have experience working with credit bureaus to remove mistakes from their clients’ credit reports.
There are several different kinds of inaccuracies that you should look for, including the following:
- Duplicate accounts
- Inaccurate accounts
- Accounts that don’t belong to you
- Incorrect inquiries
- Inaccurate address or name
- Employment history
If you notice any of these on your credit report, you have the right to dispute it because of the Fair Credit Reporting Act. You also have the right to know what is in your credit report and to challenge anything that is incorrect.
You can hire a credit repair company to file disputes on your behalf, or you can file them yourself. Many people prefer to work with a credit repair company because these professionals have experience in working with the credit bureaus, and they know what kind of documentation you need to have items removed.
Credit repair companies cannot help you with anything on your credit report that is valid. If you have late payments or charged off accounts, they will remain on your report for seven years. These companies will only help you with inaccurate information and errors on your credit report.
How to Spot a Legitimate Credit Repair Company
The first thing that you want to do is make sure that the company is reputable. Read client reviews and make sure that they have a lot of experience. They should speak to you professionally, and you should have confidence after talking to them. In addition, look out for these red flags:
- They should not ask for payment upfront.
- They must provide a written contract.
- They should not tell you that it is a quick process.
- They should not have any complaints from other customers.
- They should never guarantee a specific score increase.
- They should not ask you to be dishonest.
- They should not tell you that they can remove a valid debt.
- They should not promise that anything will be removed.
- They should never tell you to create another identity with an EIN.
- They should tell you that you can dispute the mistakes on your own.
It is important that any credit repair company that you are considering adheres to the Credit Repair Organizations Act. You will want to look for the following characteristics as well:
- They should offer a free consultation.
- They should have been in business for at least five years.
- They should not have any violations.
- They should follow local laws.
- They should provide you with your options.
- They should offer a performance warranty that says you will not pay if they don’t remove items.
- They should tell you that you can file disputes on your own if you choose.
When to Call a Credit Repair Company
You should call a credit repair company if you find errors on your credit report. It is important to check your credit report regularly, and you are entitled to a free credit report every year. It is best if you catch misinformation early on before it has a chance to harm your credit score.
If you notice anything that is inaccurate, you will want to file a dispute. The credit repair company can do this for you. They will obtain your credit report from all three bureaus, Experian, Equifax, and Transunion. This is important because all three should have the same information. They will look for inaccuracies and then go over the reports with you.
Once it is time to dispute the information, the credit repair company will tell you what documents they need, if any, and they can file the disputes on your behalf. The credit bureau is then required to verify the debt or remove it.
Can a Credit Repair Company Help with Valid Debt?
Unfortunately, a credit repair company cannot help you with any valid debt. Any company who tells you otherwise is not a company you should work with. If you have derogatory marks on your credit report, most of them remain there for seven years. This includes the following:
- Late payments
- Short sales
- Charge offs
- Tax liens (from the date of the payment)
- Chapter 13 bankruptcy
In addition, collection accounts will stay on your report for seven years and an additional 180 days, and bankruptcies other than Chapter 13 will stay for 10 years from the date of filing. Once the time has passed, these items will fall off your report.
The good news is that although your credit score will take an initial hit, after two years, these derogatory marks will have less of an impact. The important thing is to rebuild your credit right away. If you have a late payment, you should work hard to get caught up and make sure that you aren’t late again.
What Is a Credit Score?
Your credit score is based on a number of items in your credit report. The first thing to understand is what is in your credit report. The first section contains your personal information. This includes your name, other names you may have used, your addresses, your phone number, your date of birth, and more. There can be mistakes in this section, so be sure to check it.
The next section contains legal financial information, such as judgments, liens, wage garnishments, and bankruptcies. Make sure that you check this section as well.
The third section has all of the information on your debt. It has mortgages, student loans, auto loans, credit cards, and more. It will show your balance, how much you have paid, how much you owe, and it will show any late payments. You will also find any closed or charged off accounts in this section. Pay close attention as you go through it.
Your credit score looks at a number of factors based on your credit report, including the following:
- Your payment history (35% of score)
- Your credit usage (30% of score)
- The length of your credit history (15% of your score)
- The type of credit you have (10% of your score)
- Credit inquiries (10% of your score)
When you take a look, you can see that 65% of your score is based on paying your bills on time and keeping your credit usage down. This shows how important it is to pay your bills on time. They want to see your credit utilization below 30%, so you should try to pay down your balances.
If this isn’t possible, you can open another credit card or line of credit. This will raise your overall available credit, which will lower your utilization. You will see your score rise if you pay your bills on time for six months and keep your credit usage under that 30% threshold.
If you are not able to open another credit card, you can consider a secured card. You will make a deposit, which will be the equivalent of your credit limit. You will pay the bill each month as you do any other credit card. This can help to boost your credit score.
How to Improve Credit
The first two things you should do are pay your bills on time for six months and work toward reducing your credit usage. In addition, you can negotiate any collection debt on your report. Don’t make payments until you work out a settlement, and try to get them to agree to delete the item from your report once you pay it.
In addition, you can minimize how often you apply for credit, and make sure that you have a mix of credit types. You could open a bank line of credit, pay down your balances, and this can help boost your credit.
Finally, you can use Experian Boost to add your utilities to your credit score. They will only count if they are paid on time, so there is no risk to doing this.
There are legitimate credit repair companies out there, and they are not hard to find if you know what to look for. We help with credit repair, so feel free to contact us for information on how we can help. Although you can dispute these inaccurate items yourself, you may have peace of mind knowing that an experienced professional is on the job.
If you find that there are inaccuracies on your credit report, don’t hesitate to take action. You need to take care of this before it reduces your credit score. Removing these inaccuracies can help you clean up your credit report so that it is ready if you need a new loan.
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