Credit repair companies help customers review their credit reports and correct or eliminate inaccurate items to improve scores. Applying for something like a mortgage or car loan is difficult if you have bad credit. credit repair is the process of hiring a company to correct your bad credit by eliminating inaccurate and negative information in your credit reports. Credit repair is the process of trying to correct those problems.
If the information is accurate, there is little anyone, even a professional credit repair company, can do to change it. In most cases, it will stay on the credit report for up to seven years, after which it will disappear. Legitimate credit repair services check your credit reports for information that shouldn't be there and dispute it on your behalf. Many of them also make sure that the information does not appear again.
Unfortunately, none of those promises are true. Credit repair companies offer to “correct your credit” by removing negative elements from your credit report. Offer to file negative item disputes on your behalf with credit bureaus and have them removed. What is the problem with this approach? The whole strategy is based on exploiting a legal vacuum in the credit system.
When accurate items are removed, it's only temporary, a few months, at most. A fraudulent credit repair company, for example, may claim that it can help you hide negative account or bankruptcy information. After paying the company, they may provide you with a nine-digit number that looks like a Social Security number, calling it a credit profile number or a credit privacy number. They may also direct you to request an Employer Identification Number (EIN) from the Internal Revenue Service.
A credit repair company is a third-party service that contacts credit reporting agencies on your behalf. In exchange for a fee, the company will eliminate inaccurate or negative information and help you improve your credit over time. A credit card company will review your credit report information for you and look for any errors. This is what industry experts call banks, credit unions, savings and loan institutions, mortgage lenders and credit card issuers.
Since buying a home is such an important decision, it might also be worth enlisting the help of credit repair professionals. This can happen when creditors report misinformation to the credit bureau or if an identity thief takes out credit in the consumer's name. Historically, mail has been the preferred method for credit repair companies for several reasons. Keep in mind that there's nothing a credit repair company can do for you that you can't do on your own.
The theory with payment for elimination is that it keeps the customer happy because they only pay for tangible results, and the credit repair company stays on the right side of the CROA because they don't charge their customers until after the results have occurred. Typically, these companies offer to review your credit reports and address any negative elements they can with credit reporting agencies on your behalf. You may be entitled to additional free credit reports in certain circumstances, such as after placing a fraud alert, becoming unemployed or receiving public assistance, or having been denied credit or insurance in the past 60 days. If you have negative information that could be contributing to a poor credit score, then you are a good candidate for repair.
And finally, credit repair companies cannot compel or incite you to sign a waiver that would waive some or all of the rights mentioned above. The goal of these companies is to increase their credit by challenging outdated or incorrect information in their credit reports, tracking results, and monitoring to ensure that errors don't recur. The cost of hiring a credit repair company will depend on the type of service and the level of participation you are looking for. The Better Business Bureau (BBB) does not accredit any credit repair company, given the high number of fraud cases in the industry.
By law, you are entitled to a free credit report every 12 months from each of the three major national credit bureaus Equifax, Experian and TransUnion. Enacted in 1996, CROA clearly expresses what credit repair companies must do, and should not do, to comply with federal law. . .
Leave a Comment