Should I Hire a Credit Repair Company?

Fixing a credit score is a tricky process. When your reports are flawed, erasing the errors is not easy. Repair companies offer to do it on your behalf, but are their services worth paying for? After all, any consumer has a right to raise their score for free.

Professional repair has two crucial advantages - convenience and speed. A team of paralegals will communicate with bureaus, creditors, and collectors to boost the score as soon as possible. At least, this is true for honest providers. This website lists the best credit repair services and companies of 2023. To understand if they are necessary, consider the following aspects.

Why You Need to Raise the Score

This indicator affects more spheres of life than you could imagine. It can prevent you from getting a dream job or renting the best apartment. Insurers, employers, landlords, and lenders all check FICO scores to assess applicants. The second most common system, VantageScore, uses similar parameters and data from the same reports.

You can check the score at any time through apps like Credit Karma. It is also accessible from www.myfico.com. The total ranges from 300 to 850 and anything below 580 is interpreted as "poor". The logic is straightforward. By erasing negative events that never happened, you boost your status. Here are four key stages.

1. Report Collection

Downloading official records from the bureaus is a breeze. All you need to do is go to www.annualcreditreport.com and submit your request. As lenders share data with different agencies, it is crucial to involve all three: TransUnion, Experian, and Equifax.

Before the pandemic, every citizen could download their data once a year. Now and until April 20, 2023, this service is provided weekly. A credit repair firm will collect the reports on your behalf.

2. Report Analysis

After obtaining the records, you should examine them very carefully, going line by line. Any accuracies may be formally disproved. The mistakes range from misspelled addresses to false bankruptcies. Please note that only wrong information may be changed. An expert will spot and prioritize the derogatories based on the damage to your score.

For example, the payment history accounts for 35% of the FICO total. Therefore, missed and late payments are some of the most consequential events. In addition, derogatories have different lifespans. Some bankruptcies stay on the records for a decade, depending on the chapter filed. If you want to increase the score quickly, you need to know what to focus on.

3. Collection of Evidence

You cannot demand deletion without proof. A bureau will consider bank statements and other documentation confirming that the entries are false. Consumers must be meticulous in their preparation, as the agencies will request more evidence if they are not convinced. They respond to any dispute letter within 30 days. The process may take many more months if the proof is inconclusive.

Repair experts will communicate with your lenders to gather the necessary evidence. Through debt validation letters, they may confirm that you do not owe the specified amount. In some cases, creditors may agree not to report particular items if they receive a goodwill letter. All in all, preparation is a crucial stage, as it defines the outcome of your subsequent dispute.

At the same time, the company may liaise with collectors who are bothering you. With cease and desist letters, it can stop their annoying phone calls. This measure is effective but requires caution. If the lender runs out of ways to contact you, they may resort to legal action. An expert will tell you if you should or should not use the trick.

4. Formal Disputes

Based on the evidence, the team will compose dispute letters to the bureaus whose reports are flawed. Depending on your service package, you may delete a limited number of items per billing cycle. As a rule, the cheapest plans provide five disputes monthly. The more derogatories you want to be removed - the more expensive the service.

It is also possible to compose those letters on your own. The Federal Trade Commission has free templates you can download. It is advisable to send all letters by certified mail. This will leave hard evidence of the exchange. By law, each bureau must investigate each claim and reply within 30 days.

There are three possible outcomes. The agency may accept the changes, reject them, or request additional evidence. If your dispute is successful, the derogatories are erased from your records, and you receive a free copy of the amended report.

The Bottom Line

Do you think you can handle all these tasks on your own? A repair firm is likely to achieve results faster. Experts know which derogatories to tackle first, and how to collect convincing evidence.

Even if your score is perfectly fair, repair services may come in handy. When poor totals stem from irresponsible borrowing, the only way is rebuilding. This may take years! Some companies offer dedicated credit lines. They help clients become creditworthy again more quickly.