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How Do Credit Repair Companies Work?

Credit repair companies are going to work under a federal law called the Fair Credit Reporting Act. This law says you can dispute any item that you feel is inaccurate on your credit report.

It also requires the credit bureaus to investigate your dispute. Lastly, it says an item can only remain on your credit report for a maximum of 7 years.

How Do Credit Repair Companies Work?

The first thing you must do is get a copy of your credit reports. You need to get a copy of your report from each credit bureau, 3 in total. Your entitled to one free copy annually. You can request this by visiting Annual Credit Report.

Once you have your credit reports look at them closely. Identify items that you feel are questionable or inaccurate. These are the items that the credit repair company is going to dispute for you. Next, you pass along this information to the credit repair company.

You should know that you can never face any legal trouble for disputing an item that you know is accurate on your credit report. It would be in your credit scores best interest to remove negative credit information from your credit report. An item can be inaccurate for any number of reasons such as:

  • Wrong balance
  • Wrong dates
  • Not my account
  • Account is paid
  • Debt is older than 7 years
  • And more

How The Credit Dispute Process Works

Now the credit repair company is going to file a credit dispute with each one of the credit bureaus. This is to have them investigate the items that you requested. Once the credit bureaus get your credit report dispute and conduct an investigation.

The credit bureaus will contact the lender or collection agency to verify the debt, the dates on the debt, and the balance owed. If the account is not verified by the lender then according to federal law. The credit bureaus must remove it from your credit report.

This will improve your payment history. This is an incredibly important piece of information when your credit score is calculated. You will get a letter in the mail notifying you if the item was removed or verified. The credit bureaus will also tell you if the item was removed or updated on your credit report in this letter.

Be aware, that if you erase bad credit from 1 credit report. It does not mean it will be erased from the other 2 credit reports. In other words, each credit bureau must investigate the item. There will be 3 letters you get and 3 different investigations.

You need to pass the investigation results along to your credit repair service. This will help to make sure they are only providing necessary work for you.

How Much Does a Credit Repair Company Cost?

You should avoid private credit repair attorneys or lawyers. Often, they want to charge an hourly rate and this will become a sky high credit repair bill.

Instead, you should expect to pay about $150 upfront. Then a monthly charge of about $80 – $100. You can expect to get professional credit repair help for roughly 6 to 12 months. But no guarantees. Everyone has a unique credit situation with different needs.

The Best Credit Repair Company

The best credit repair company is going to provide you with:

  • Excellent customer service
  • Have a proven track record
  • Have expert credit lawyers on staff
  • And glowing reviews from past clients

Always use caution and perform some research before handing anyone your hard earned money. Make sure that you do take action to get a clean credit report. And stop living with the expense of bad credit.

Did you know there are increasing reports of employers checking a candidates credit record before offering them a position? We have also heard credit checks are being performed before an offer for a job promotion! Don’t let your career suffer or your pocket for mistakes of the past.