A poor credit history and score will make your life more difficult in countless ways. But bad credit can be repaired, especially if you have mistakes on your credit report. You may be a good candidate for credit repair if you've got some debt and a credit score that doesn't accurately reflect your creditworthiness. While it costs money and it takes a little time, it helps to know how credit repair works to see if you’d benefit.
What is Credit Repair?
Credit repair is the process of evaluating your credit report, looking for errors and disputing those errors. Is this the sort of thing you could do on your own? You probably could, but it will take a lot of knowledge, time and patience. A credit repair agency, like Lexington Law or Credit Saint, that does this professionally can handle the process much faster and generally with better results.
What Can Credit Repair Help With?
Credit repair primarily helps in two ways: by helping you more effectively manage your debt so you can pay it down, and by disputing errors on your credit report that are hurting your score. Some examples of errors may include:
- Accounts that aren’t yours (due to divorce, mistyped social security number, or mistaken identity)
- Sold accounts that report twice on your report, both delinquent
- Old negative credit information that’s past the statute of limitations
- Accounts with incorrect status (open when it’s closed or close when it’s open)
- Wrong information (balance, payment record, name, etc.)
The dispute process can be time-consuming, which is why it's best to engage the services of a company that has experience successfully navigating it. Legally, any item on your credit report is eligible for dispute, and a credit repair agency will write dispute letters to the various bureaus (Equifax, Transunion and Experian) for listings which are incomplete, ambiguous, unverifiable, or eligible for removal.
Credit Repair Can't Rewrite History
Credit repair can't erase bad behavior that is accurate. For example, if you paid your credit card late for 3 months in a row, a credit repair company won't be able to erase it from your history. Credit repair also doesn’t directly increase your credit score. While your credit score will likely increase with credit repair if the agency is able to , its essential focus is eliminating disputable information on your credit report.
How to Use Credit Repair
Hiring a credit repair company makes the process of disputing incorrect information much quicker and easier on you. To get started, you must:
- Give the credit repair company permission to pull your credit reports
- Review your report with the agency to spot any errors on your credit report
- The credit repair company will then create a plan to dispute and correct the information
Credit repair companies often have relationships with credit reporting agencies and they should have good negotiation and delegation skills to make sure that the mistakes are properly removed from your report.
Reasons to Consider Using a Credit Repair Company
While you may be able to file a dispute yourself for one or two mistakes on your credit report, beyond that it becomes a logistical mess to handle yourself. You may want to consider hiring a credit repair company if:
- You have numerous mistakes on your credit report
- Your report includes serious mistakes that will take a lot of research and communicating to get resolved
- You don’t have the time to follow up with the credit bureaus and the creditor themselves
- You don’t have good negotiation skills
Watch Out For Scams
Before engaging the services of a credit repair agency, you should take the time to research the company to determine whether or not they are legitimate. Read reviews on sites like TrustPilot and see what others are saying about them online.