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What Is Credit Repair And How Does It Work?

What Is Credit Repair And How Does It Work?

Credit repair is the process of repairing a bad credit score by resolving or removing negative things from your credit reports that are incorrectly posted. Although Americans have the right to accurate credit reports under the Fair Credit Reporting Act, credit reporting organizations need you to traverse intricate internet systems and write a series of formal dispute letters to repair your credit.

While you may repair your credit on your own, navigating the procedure can be difficult if your credit report has several inaccuracies. If this is the case, a credit repair company may be able to assist you.

Credit repair is a multi-step procedure that involves reviewing your credit report for errors and disputing them. 

When Does Credit Repair Come In Handy?

When your poor credit score prevents you from qualifying for a mortgage, car loan, or any other qualified line of credit, credit repair can help. When your credit score is low, you’re more likely to be charged higher interest rates and finance charges. Repairing your credit might make you eligible for a lower interest rate and reduce the amount of interest you pay over time.

The good news is that you don’t have to live with bad credit for the rest of your life. Taking the necessary actions to repair your credit and maintain good financial habits will help you get your bad credit back on track.

How Long Does A Credit Repair Take

However, because each credit report is different, there is no way to forecast how long it will take to repair your credit. Credit bureaus are supposed to respond to and resolve credit disputes within 30 days, with the possibility of a 45-day extension in exceptional situations. Though that appears to be a short time frame, the ordinary consumer may have many errors to contest, so it might take anywhere from three to six months.

You’ll need some time to download and study your reports, gather any appropriate financial paperwork, and create the actual dispute letters if you’re fighting the inaccuracies yourself. After you’ve sent those to the credit bureaus (either by mail or online), the 30-day process will begin.

What Services Do Credit Repair Companies Provide?

Credit repair companies assist you in disputing discrepancies on your credit reports with credit bureaus and creditors in hopes of improving your financial score and better understand your credit situation. Credit repair businesses can assist you in resolving credit concerns that might otherwise be difficult to settle on your own because certain credit circumstances are more complex than others.

Credit repair companies will start by getting your credit reports from TransUnion®, Experian®, and Equifax®, the three major credit bureaus. Because certain credit bureaus only report to one, there may be problems on one report that don’t appear on the others, which is why credit repair businesses should pull all three.

Credit repair companies will check for the following problems while reviewing your credit reports:

  • Incorrect inquiries
  • Inaccurate accounts
  • Accounts that don’t belong to you
  • Duplicate accounts
  • Delinquencies and derogatory marks
  • Fraudulent activity
  • Missing accounts that should be listed on your reports

They may request further documentation to help them establish the inaccuracies once they’ve spotted them. They’ll file the disputes and work with the credit bureaus to fix the issues after they have all of the relevant information.

These companies will also assist you with any credit-related concerns you may have, and once the errors have been resolved, they will offer you with information on how to maintain a good credit profile.

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