Credit repair is legal. However, it is not liked by the credit reporting agencies or otherwise known as credit bureaus. If you think about it, it makes complete sense that you should be able to fix your credit report if there are errors or inaccurate information on it. You can either restore your credit yourself or you can hire a professional company to assist you.
Credit repair – What is it?
It is the process of challenging and ultimately getting negative and inaccurate information removed from your credit report. Quite frankly, any item on your credit report can be scrutinized – even correct information. The credit repair process usually takes a minimum of 3 months, and can take as long at 12 months with the typical plan not lasting more than 6 mo. It can take this long because of the time it takes to dispute items with the credit reporting agencies and to have creditors respond and then to have your credit report and scores updated. Sometimes you have to repeat the dispute process several times. To dispute an item, you must write a letter about it and send it to the credit reporting agency. If you have proof of something that you disputing, make sure you send a copy of your original documents.
Credit reporting bureaus or agencies – who are they and what do they do?
These folks collect and manage your credit information and history from your respective creditors. They have a responsibility to fix mistakes on your report, but they don't have to fix anything unless you question it. This is why it is a good idea to keep a close eye on your credit report. Getting your credit at least once a year, if not every quarter, should be enough to make sure your credit is protected and accurate. When you dispute an item on your report, the credit bureau generally has to verify their information and in some cases produce in writing proof of the information they list on your report. If they cannot, then they must correct or remove the information from your report.
Do I use a company to fix my credit report or do it myself? Well this depends, are you motivated to do it, or do you want to have a professional company do the work. I see advantages in doing it either way. If you do it yourself you will know exactly what is happening and you save money. When you hire a company to work on your behalf then you shouldn't have to worry about it getting done. Also, professional company knows exactly what to do people have dedicated to do the work for you.
There are a lot of folks out there "fixing" credit reports. Beware of who you work with. Here are a few warning signs that if you see them, don't pay them any money and run:
o If they use the words "we guarantee", "we can remove … forever",
o Payment plans where you are required to pay for an annual contract (month to payment plans are the way to go)
o If the company suggests you use a Employer Identification Number instead of your Social Security Number to establish a new credit report
o If the company doesn't tell you about the things you can do yourself to speed the process along
o If the company does not tell you your legal rights.
o If the company wants paid upfront for the services they will provide.
Credit repair is a bit controversial as there were and are many companies out there that have only their best interest in mind – having you pay them for them to do nothing. If you are looking to hire a company check around, see if you can get a referral from someone you know. Go to the Better Business Bureau and check out the company you are thinking of hiring to see if there are any consumer complaints about them.
Is this process worth it? I say it is no matter whether you do it or you hire someone to do it for you. Credit repair can result in increased credit scores and better credit history. With both of these in your favor, you'll be able to qualify for better interest rates for a home or an automobile, or even a better interest rate credit card.