Having bad credit may seem as if there is no way you can recover from this vice. The negative information in your credit reports including the payments made in the last month, collection accounts, and others considerably lowers your credit score. It is embarrassing not to be able to get approved for loans, credit cards, mortgages, apartments, and many other opportunities when one has a low credit rating. This is especially appealing because you can hire a credit repair company that will have the negative marks removed, and your credit reports look polished again. But it is not quite as straightforward as that. These are the important things you should know about paying to have bad credit wiped.
This is so because credit repair companies do the following:
Credit repair companies claim that they can delete negative items from your credit reports, including information that is accurate and being reported properly. This list is rather impressive and makes rather grandiose claims about their ability to delete things like bankruptcies, late payments, charge-offs, collections accounts, and more. The services are not necessarily cheap either and most of them will cost $500 or more for the initial setup in addition to the monthly fees.
The essence of credit repair firms is that they challenge negative entries on credit reports that may or may not be inaccurate. Credit bureaus must follow the guidelines provided by the Fair Credit Reporting Act and they have 30 days to respond to the consumer if he or she has disputed some information on the credit report. Some credit repair companies take advantage of this clause by sending numerous letters of dispute to the bureaus aware that these bureaus would probably not spend sufficient time researching each letter to meet the one-month deadline.
This can temporarily eliminate accurate negative data from the credit report if the credit bureau is unable to confirm it within the time allowed by law. However, if and when the credit bureau can do the investigation of the credit items and determine that all the items are reporting correctly then it will reinstate the item into the credit report. As a result, this credit repair strategy is only effective for a short period and the bad credit re-emerges in due course.
The reason self-credit repair strategies are not very effective
While credit repair companies imply that they can remove all negative credit information, their dispute tactics run up against legal limitations: While credit repair companies imply that they can remove all negative credit information, their dispute tactics run up against legal limitations:
- Accurate information can be re-reported: During the temporary removal period, the credit bureau investigates the disputed information, and if they prove that it is accurate, then the negative mark is legally allowed to reappear on your credit report.
- Negative info stays for 7-10 years: Most information that reflects adverse information remains on your file for 7-10 years based on the specific type of item. Credit bureaus do not need to delete accurate, timely information merely because a consumer does not wish for other lenders to be privy to such details.
- False information is illegal: The state laws against credit repair organizations prohibit the companies from giving consumers such information about their credit rights which are fake. For instance, it is unlawful to guarantee that accurate items can be permanently deleted.
This makes it almost impossible for credit repair firms to legally meet the expectations on the promises of making credit reports clean slates. Late payments, collections accounts, and public records will recur in the reports, if not, it is enough seven to ten years standard reporting period.
DIY Credit Repair Options
Albeit different from the credit repair company, there are legal ways you can help yourself to improve your credit score at some point in time.
Request validation: If you have any grounds to think some of the information that is reflected in your credit reports is adverse, you can dispute items on your own by requesting that the credit bureaus validate the information that you dispute. However, you need to have a particular cause to suspect that an inaccuracy is present, such as the fact that the debt is old or already paid.
Goodwill letters: You can write goodwill letters requesting lenders to delete the credit report of specific payments that you made on a later date but they were reported early. This is subject to the mercy of the lenders and only gets occasional success but nothing is lost in being polite and asking if the lender would consider erasing the black mark.
WaitFor expiration: However, negatthe ive information will also fade away with time, and in the best estimation, it should take seven to ten years depending on the item. Rubin also said that burying bad credit is easier and this makes more sense in the long run than fixing bad credit.
Improve credit habits: Paying all bills on time in the future, opening new responsible credit, and maintaining low balances on credit cards about credit limits are surefire ways of improving your credit scores. Better credit behaviors are more permanent and thus capability of erasing past mistakes.
Is It Right to Pay for Credit Repair?
A serious credit repair case is very rare and does not include clear errors that you can delete from your reports. More often than not, the adverse information that leads to credit illness is real and reported accurately by other credit bureaus and lenders. Contrary to what credit repair companies may suggest in flashy ads, accurate late payments and collections accounts do repave and persist in reincarnation for as long as years, dragging credit scores with them.
In conclusion, the two case studies reveal that individuals cannot avoid bad credit histories. Thus, time and the constant and persistent effort to practice good credit behavior are necessary to genuinely rebuild credit. It is important to note that the practice of paying thousands of dollars to a credit repair firm involves getting those unfavorable entries removed only for them to be legally placed back the following year. The same money is better spent for credit counseling services which can offer you solutions that are specific to your circumstances.
Call now for expert credit repair services: (888) 803-7889
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