What Exactly Do Credit Repair Companies Do?

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Many people have experienced some kind of event in their lives that takes its toll on their credit scores. They might have a divorce, a health crisis, or a change in employment. The good news is that you can start rebuilding your credit pretty soon after you take a hit. You can also talk to a credit repair company about challenging and removing inaccuracies from your credit report.

What Is a Credit Repair Company?

A credit repair company helps people dispute items on their credit reports that are inaccurate. They are able to analyze your reports from all three bureaus, and if anything is incorrect, they have experience disputing it and having it removed from your credit report. They are familiar with the Fair Debt Collection Practices Act and the Fair Credit Billing Act, which are laws that protect you from unfair practices.

Although you can challenge items on your own, it can be helpful to use a company that has years of experience and understands the entire process.

A credit repair company cannot remove items that are accurate. For example, if you have late payments and you actually paid those bills late, they will stay on your credit report for around seven years. The good news is that once you establish a current history of on time payments, they won’t carry as much weight.

What Can a Credit Repair Company Challenge?

After the credit repair company obtains a copy of your credit report from all three credit bureaus, they will go through and look for obvious mistakes. For example, the balance should be the same for an account on all three reports. Sometimes a creditor doesn’t update your information, and the credit repair company will notice this.

They will meet with you and go over the reports to look for the following types of inaccuracies:

  • Duplicate accounts
  • Inaccurate accounts
  • Accounts that don’t belong to you
  • Incorrect inquiries
  • Inaccurate address or name
  • Employment history

Understanding Your Credit Report

Your credit report has a lot of different information in it. It starts with your personal information, which includes your name, other names such as your maiden name, your birth date, your address, your employer and other employment history, and more. If any of this information is inaccurate, you will want to change it. For example, they may accidentally have someone else with a similar name mixed up in your credit report.

Another section will have any court related financial issues, which can include liens, judgments, bankruptcy, or wage garnishment. These items can impact your score, but they lose impact over time.

The next section will include your creditors, such as credit cards, auto loans, mortgages, and loans. It will show your credit limit, how much you owe, and how much has been paid off.

Your credit score is made up of five categories, which are 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)

Do Accurate Negative Marks Ever Come Off the Credit Report?

Most negative marks stay on your credit report for seven years. It is very important to pay your bills on time because this information is on your report. The following information stays on your report for seven years:

  • Foreclosures
  • Repossessions
  • Late payments
  • Short sales
  • Charge offs
  • Tax liens (from the date of the payment)
  • Chapter 13 bankruptcy

Collection accounts will stay on your report for seven years plus 180 days from the original date of default, and bankruptcy stays on for 10 years from the date of filing, unless it is Chapter 13.

How to Improve Your Credit Score

If you have made payments late or have missed payments, the first step is to make your payments on time. Once you build up a history of on time payments for six months, this will improve your score. Remember that late payments take a toll on your score.

It’s also important to use less than 30% of your overall  available credit. This shows creditors that you are not living on the edge financially. If you can’t pay down your cards, you can consider opening another line of credit. You can open a secured card if you need to, where you make a deposit that is equal to your credit limit. This will increase your credit availability.

Finally, the credit bureaus allow you to report your utility and cell phone bills, which will allow you to boost your score with on time payments for these bills.

What Happens When You Hire a Credit Repair Company?

When you call a credit repair company for help, the first thing they will do is obtain a copy of your credit report from the three bureaus, Experian, Equifax, and Transunion. They will go over the reports to look for any inaccuracies.

They will meet with you to get your input, and they will let you know what evidence they need to file the disputes. They will then file the disputes with the credit bureaus. They may send requests to validate information. Sometimes a credit card will charge off your account and sell it to a collection company. After a period of time, that collection company may sell it to another collection company. This item may appear on your credit report more than once, but legally, this is not allowed.

In addition, they will dispute items that may not belong to you. The important thing to remember is that they can only challenge items that are inaccurate, so valid debts will remain on your report.

How to Know If a Credit Repair Company Is Legitimate

It is important to do your research to make sure that you are dealing with a professional and experienced credit repair company. There are a lot of different companies out there, and you are paying for this service.

First, you should make sure that the company does not charge you for repairing your credit before they do the work. You should have a contract, and they should not make any promises that they cannot keep. If a company guarantees a particular score or removals, they are not professional.

In addition, a company should never agree to challenge valid items. They should tell you that you can dispute any of these items yourself. Remember that a good credit repair company will be familiar with the laws and regulations, and they will be able to explain to you exactly what they are able to do.

When to Call for Credit Repair Services

It is a good idea to check your credit report regularly. In fact, you are entitled to a free credit report every year. If you see anything that shouldn’t be there, or you notice duplicates of a debt, you will want to dispute it. This is when you can hire a credit repair company.

We have years of experience working to remove inaccuracies from our clients’ credit reports. If you find inaccuracies on your report, we can help you get the process started. When you know that there is something inaccurate on your report, we can send in a dispute and provide the information to the credit bureau so that they remove or update the debt.

In addition, if your identity has been stolen or someone else’s debt is on your report, we can help you remove it. The credit bureau will have to verify the debt, and if it isn’t yours, they will not be able to. If you have been a victim of identity theft, you can give us the police report and other information so that we can start the process of repairing your report.

Final Words

Your credit report is important for many things in life. It is important for getting a mortgage to buy a home, getting the best interest rates for an auto loan, and it can even play a role in your employment. It is important to pay your bills on time, and try to use less than 30% of your available credit. This will keep your score as high as it can be.

If you go through a bad financial situation in your life, your credit score may take a hit. However, it will get better over time. You can start rebuilding your credit right away by paying your bills on time. Most of the bad marks will fall off after seven years, so it will get better one day. In the meanwhile, your score will improve if you pay your bills on time.

The most important thing is to make sure that your credit report is an accurate reflection of your debt. If you notice that anything is inaccurate, you can dispute it yourself or work with a professional credit repair company to have it removed. It is important to remove inaccuracies from your report as soon as you notice them because they impact your overall score.

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We encourage people across the nation to live a life with more options. The Grandaddio Credit restoration and advisory program is a great step in that direction. If your your credit reports are hurting we know how to help.

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