Challenges of Credit Repair


When done right, credit repair can be very beneficial and safe. However, sometimes people try to clean up bad credit without having a good understanding of the process. As a result, they end up in a mess and without accomplishing the goal of getting credit fixed. Today, the number of people going through the credit repair process or working with repair agencies has skyrocketed, primarily due to tough economic times. While the majority of agencies are professional and reputable, some are not.

If a qualified company is used to help with credit repair, they will find all types of errors, inaccuracies, and omissions that could improve a person?s credit score. On the other hand, if done the wrong way, or if the company is not on the up and up, they will leave the person with even a greater pile of problems than what he or she initially started with. For this reason, people need to make wise decisions regarding credit repair agencies.

One of the challenges is that dishonest credit repair agencies will actually take advantage of a person, specific to his or her fear of having a bad report. This means the agency will make huge promises that unfortunately, cannot all be met. Any company that has an aggressive marketing or advertising system is one that should be looked at carefully in that an honest company would not need to use scare tactics in helping people with credit repair.

Another challenge associated with some companies that offer credit repair services is that while they might assist a person, they charge outrageous fees to do so. For example, if an agency were to tell a person that they have a special arrangement or connection with the three credit bureaus but charge a large fee to get the report cleaned up completely and quickly, the individual needs to understand this is untrue. The fact is that agencies that work with credit repair have no special relationship with credit bureaus. Regarding fees, while there might be nominal fees involved for the assistance, anything more than $100 is too much.

Credit repair agencies do not hold some type of magic wand in which they can help a person get a perfectly clean report in a short amount of time. The truth is that while getting credit cleaned up is certainly possible, it requires time and effort. Additionally, many negative items being reported on a person?s credit report can be removed or corrected but some things will stay on the report for years. A great example is a bankruptcy, which by law, stays on the report for 10 years.

People need to understand that the services offered by a credit repair company are the same actions they could take. The only difference is that instead of the person with bad credit ordering the credit reports, going through to find problems, and then making the request for change, the agency does the work. For this reason, people should consider handling credit repair on their own. Setting aside a little time and knowing the right procedure is all that a person needs to have success.

Now, once a person orders his or her credit report from Experian, TransUnion, and Equifax, the three reporting credit bureaus that creditors use, every item would need to be carefully reviewed. Once mistakes, inaccuracies, or omissions are identified, the individual would make a copy of each report and make a list of the things that need to be taken care of. Another part of the credit repair process is writing a one or two paragraph letter requesting the changes, followed by sending the letter, the copy of the report with mistakes, and any supporting documentation to the respective bureau.

In addition to the initial report people can get to use for credit repair, everyone should take advantage of the free, annual report offered by each of the credit bureaus. This request can be made online, via mail, or by phone and within 30 days, the individual receives the new copy. This way, along with the original process of credit repair, the annual report allows the person to check for additional problems on a regular basis, keeping the credit score high.

Once the credit repair process is done, people would find that their FICO score improves. While the process may need to be completed more than once, the effort and time is worth it. After all, with credit repair and a higher reported score, individuals have greater buying power, they are offered lowered interest rates, and even considered for jobs that they might otherwise be passed over for, all reasons credit repair is so vital.

Even if a person needs to order a copy of his or her credit report in addition to the free copy available each year, the price is very low, typically less than $20. Usually, once the credit repair process is complete, keeping the report healthy is easy but for any reason, reports can be ordered at any time.