Bad credit does affect almost all aspects of your financial life in different ways since it is such a powerful tool. You might fail to access credit facilities such as loans and credit cards avail of them at high interest, or have trouble with housing or other tenancy rights. Though maintaining a good credit score should be on your checklist of important aspects to work on financially, it may sound like a daunting endeavor. This gives rise to a common question – can I just hire a service to do the credit cleanup for me?
In this article, I will try to find out if it is possible to apply for credit repair companies to improve your credit situation.
The Seductiveness of Credit Repair Companies
These credit repair firms will tell you that they can erase the negative information from your credit reports or increase your scores in the shortest time possible and make lenders have a more positive attitude towards you. This appeals to those who reject credit and money problems.
Many credit repair services boast unbelievable claims, such as:
This means that you can have all the bankruptcies, judgments, liens, and bad loans that seem to plague your credit report eliminated permanently.
- The phrases that were used in the adverts include: * ‘We can remove your bad credit – guaranteed.’
- It says that ‘’there is a possibility of eradicating more than 90% of all negative credit in a month.’’
The appeals are enticing. However, can credit repair organizations do this? That said, let’s examine their claims to determine if they are substantiated.
Following our analysis, the basic question of whether credit repair companies work is not easily answered due to the complex nature of credit repair services.
The short answer is yes, some credit repair services use false or high-pressure information at best or may employ unlawful practices at worst. Somewhat useful but it stresses that there is nothing that can solve bad credit from reputable companies.
According to the Consumer Financial Protection Bureau (CFPB), some signs a credit repair company may be a scam include:
- Encouraging you to provide false information about your credit/loan applications.
- We have come across certain self-proclaimed credit repair companies making false statements such as only them capable of having adverse information deleted from credit reports (this is a lie as nobody is entitled to delete accurate information).
- Suggesting that you apply for new credit accounts to eliminate the negative credit history.
- When you decide that you should start charging your customers before you render any service to them.
Even when not outright scams, credit repair companies use questionable strategies like:
Disputing All Negative Items: They apply for credit reporting with credit bureaus and challenge every negative mark in an attempt that at least one will be removed even if it is a mere falsehood. This rarely works and often leads to a confrontation.
Misleading Guarantees: All the companies state that they can eliminate almost all bad credits but when they give the fine print details and disclaimers, the real success of 10-15% is revealed.
Pushing Credit Monitoring: It is the kind of business that has been known to sell expensive credit monitoring services that customers could purchase cheaper elsewhere.
But then again, if credit repair companies overemphasize their services, mislead consumers, and charge extremely high fees, should one avoid them completely? Not necessarily.
The Worth of Credit Repair Companies
Reputable credit repair services follow credit laws and provide real value, such as:
- Getting copies of the specific dispute letters to address the identified errors
- Analyzing reporting errors and assisting clients in the procedures of rectification
- Teaching the customers the good practices that help in establishing credit.
- Assisting in the analysis of credit reports on how credit can be made better
- Managing loans and debts
- Providing various free credit monitoring tools
For difficult credit issues, or for clients who might not have the time or assurance required to self-administer credit recovery then this assistance can be valuable. However, it is advisable to consider several factors before engaging the services of a credit repair firm but there exist lawfully certified credit repair firms that can assist in making the necessary legal changes.
Just set realistic expectations. Nobody is legally capable of deleting good information or turning bad credit around quickly. Pat smiling business: expect slow and calm with argumentation – no tricks.
Credit repair companies refer to organizations that help people to manage or reclaim their credit status.
Although there is some merit in credit repair services, there is often a possibility of fixing credit all by yourself without having to pay any amount of money. Here are smart alternatives:
Review Credit Reports
Further, you will need to go through the credit reports from Equifax, Experian, and TransUnion to understand what factors are lowering your credit score. Challenge the information with bureaus if the entries are erroneous. This is preferable to sketchy arguments from a repair company that may be trying to rip you off.
Improve Financial Habits
It outlaws which have high balances, payment amounts, and collection accounts have the biggest impact on credit. Always pay all the bills on time, keep the balances on the cards low, and clear any unpaid dues on your credit card accounts. This increases your score in a very sustainable manner.
Write Goodwill Letters
In cases where lenders have reported late payments but otherwise, positive credit histories, ask them to withdraw these through goodwill letters, thus eradicating the respective negatives due to shown responsibility.
Wait Patiently
Negative marks, however correct, are temporary on the memory space. Unfortunately, business failures are removed from reports 7-10 years after bankruptcy. Compensation losses due to late payments are relatively limited and last at most for 1-2 years. This makes credit to be self-retiring when people continue to exhibit responsible financial behaviors.
Thus instead of spending thousands on repair companies which may not fix what is wrong in the first place try managing credits. But with some more effort and time, it may change beyond anyone’s expectations.
The Bottom Line
Is there a way to hire someone to help you clean up your credit? Yes – but stay skeptical if you want to avoid overly optimistic prospects and inflated prices. It is therefore advisable to understand that though credit repair services may offer some value, you can independently handle some of the credit problems using savvy approaches.
In conclusion, any positive change in credit score maintenance needs to be done in a systematic manner that will help individuals develop good financial habits. There is nothing that I have come across that offers a ‘quick fix’ solution, let alone through a repair firm. However, by paying on time, reducing the debt, disputing and rectifying the errors, negotiating with creditors, and waiting for time to avoid negatives to reflect on credit reports, you can rebuild credit equally well without involving costly repair services.
Remember to be as tenacious as possible and manage patients’ expectations when it comes to the period of rehabilitation. Credit score is achievable and all one requires is to take the necessary precautions as well as take time to build it properly.
Call now for expert credit repair services: (888) 803-7889
Read More:
Can you wipe your credit history clean?
What Cannot be removed from your credit report?
How to erase your credit history legally?
