A credit repair company can erase a poor credit history. If you pay a bill late, your creditor can report this information to a credit bureau. Having a good credit rating is important. Without it, you may be denied low-interest loans and lines of credit, a job, a rent, and even an insurance policy.
If your credit report shows a history of debt problems or contains errors, you can consider using a repair service to “clean up” it. However, before you pay, learn how these companies operate. In the vast majority of cases, hiring an external company will only waste your money. Reporting agencies and lenders typically take about 30 days to investigate disputes.
Once they have made a decision, they will need to notify them within five days of the completion of the review. The notification will inform you if the disputed item has been determined to be inaccurate or not. Company promises to “fix your bad credit score” or to erase your bad credit are just ways to take your money away. Credit repair services can help consumers eliminate false information from credit reports and therefore improve.
Incorrect information may include late payments that are not yours or collections paid older than the seven years that the law allows to appear on credit reports. With a positive title like “credit repair,” it's no surprise that people fall prey to fraudulent practices by credit repair companies. They promise to “correct your credit” by disputing negative elements in your credit report. They say they can pull anything out of your report, but only real inaccuracies can be permanently removed and you can do it yourself for free.
Credit repair companies make sure you know when these items are removed, but they don't let you know when they reappear. A number of nonprofit credit counseling organizations, such as the National Foundation for Credit Counseling (NFCC), can help dispute inaccurate information on your record. But we also recognize that you may not be swimming in your spare time, so it might seem easier to set aside some money to invest in credit repair services. Many credit repair companies charge a down payment and then bill arrears (which are billed after services are provided) for monthly services.
According to the Federal Trade Commission, credit repair firms can't legally do anything for you that you can't do for yourself. Relying on a reputable credit repair company to manage the dispute process for you can still take time, but at least you can be sure that the task is being performed by a professional. Lexington Law is a credit repayment application run by a law firm with attorneys and paralegals working on your behalf to challenge negative points with credit bureaus and their creditors. Everything a debt collector, creditor, or credit bureau does with respect to a credit report will be based on the FCRA, says Joseph P.
The payment account will still appear on your credit report, but it will hurt your credit score less than if you hadn't paid it. Without this requirement by credit bureaus to avoid paying for eliminations, collection accounts would be removed all the time from credit reports and the reports would not accurately reflect a person's creditworthiness. You just need to be willing to spend time reviewing your credit reports for negative or inaccurate information, contacting credit bureaus to dispute that information, and follow up on those disputes to ensure they are being investigated. Although there is no set time frame for credit repair, credit reporting laws give you a good idea of how long you'll have to wait to see results.
Other factors considered include your credit mix, payment history, length of credit history, and new accounts. Credit repair services can help you dispute inaccurate negative information and handle negotiations with creditors. Repairing and rebuilding your credit is a long journey, whether you're doing it alone or enlisting the help of professional services. Once you have the EIN, you will be instructed to apply for a new credit with it, so that you can create a completely new credit history.