Credit repair is the act of attempting to have information deleted from your credit records for removal of derogatory items. Credit repair is also when a third party, usually referred to as a credit repair company or credit repair services company, tries to obtain information deleted from your credit files for payment in return for less than full disclosure of damaging items. These companies are generally for-profit and their main services are sold as being capable of helping individuals improve their credit rating. The Better Business Bureau (BBB) is one of several credit bureaus that keep track of consumer complaints about various credit repair companies and agencies. While these bureaus have been effective in the past, many people have complained that they do not provide full disclosure of the costs of credit repair, whether stated upfront or charged after the fact.
There are several steps involved with filing a successful credit repair dispute, and the first step is to determine what the accuracy of the negative item(s) is. In cases where a consumer is aware that they are late on a bill, but cannot figure out the exact amount due, it is recommended that a statement be written documenting the situation. Once the statement is received by the credit bureau, the customer can attempt to have the negative item deleted from their credit report by filing a credit repair dispute. The credit bureau will send the concerned agency, or in some cases the creditor, a letter asking for verification that the negative is legitimate.
Many consumers are unaware that once they have filed the dispute, the credit bureaus are legally required to investigate the matter and update their reports accordingly. As a result, many negative items will be wiped from credit reports and a more accurate credit score will be realized. However, there are a few things that most people who have attempted to work with credit repair companies or agencies are not aware of.
First, credit repair companies and agencies often do not work with all negative listings that appear on a credit report. In fact, if they do work with many of them, it is at the discretion of the credit reporting agencies as to how the specific negative listing should be classified. For instance, some credit reporting agencies only allow negative listings that were generated by collection agencies. In other cases, if the listing is simply listed as “paid”, the bureau may deem it to be inaccurate. This is why it is important to check one’s credit report with the three major credit reporting agencies at least once per year – if a negative listing appears more than once, it is important to file a credit repair request to have it removed.
Second, working with a credit repair company or agency can have its advantages. While most negative listings are automatically flagged by the credit bureaus, it is possible for a consumer to successfully have them removed through the services of a credit repair company. On the other hand, this type of service can also have its disadvantages. A credit repair company may not be aware of errors that occur on credit reports and may not be aware of any tactics that consumers can use to get negative listings removed from their credit report.
Credit repair companies and agencies charge fees for their services. Typically, these fees are minimal and most people find them affordable. However, one must remember that while the credit repair process is relatively easy, it is also very time consuming. There are many things that must be done to make the entire credit repair process effective. These things can be frustrating, time consuming, and expensive. For this reason, consumers may want to consider hiring a credit repair company instead of doing it themselves.
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