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How do credit repair companies work?
Credit repair for bad credit! You hear it everywhere and the thing about it is that nobody starts out wanting bad credit. Oftentimes credit problems happen to people who have had a long and established history of making payments on time. But due to no fault of their own: loss of job, illness or other catastrophic event happen in their lives, their credit rating has already been negatively affected.
So what can people do to turn situations like these around? First of all, don't think this is a hopeless situation. You are not alone and there are many options available to help people who are on the road to restoring their credit.
Most people are able to easily dispute negative items on their credit report, have them removed and their credit score(s) are adjusted accordingly. For others, it’s not so easy and that's when they consider professional help through credit repair.
But how do credit repair companies work?
If you are in a situation where you have not been able to successfully remove legitimate items from your report credit repair might be worth looking into. There are reputable companies that are able to assist you, but first you must arm yourself with the knowledge of how they operate and what you should expect.
Be watchful of companies who claim they can restore your credit, create a new identity and raise your credit score. Avoid them at all costs. There is no guarantee that anyone can do these things. However, a reliable company will be one that lets you know this in the beginning. It's better if the company has been around for a while, they have a good reputation and will always stand by their service with a money back guarantee.
Reliable credit repair companies work to remove legitimate errors on consumer credit reports, raise credit scores for lower interest rates and help clients get their finances back on track.
How would I know if I need a credit repair service?
If you are disputing legitimate errors or those errors can’t be verified and once removed, you want your credit score to properly reflect that change, credit repair could probably benefit you.
Although you can do this part yourself, reputable companies have the expertise and knowledge of procedures that can get the process farther along than you ever could, and if the company is willing to negotiate with your creditors during the restoration process, that’s an even greater plus.
What brings most people to the point of using a credit repair company is they don’t want to go through the hassle of dealing with the credit bureaus or any other part of the process themselves.
According to a report taken from a credit repair representative on Mint.com, “A consumer navigating the credit repair process by themselves is equivalent to doing their own taxes. It’s ok if you have a 1049 EZ, but if you run into issues, you might need to consult an accountant who knows how to navigate the 1,000 plus pages of tax code. The credit system is far more complex than anyone would have you think.”[1]
The choice is yours.
Credit repair is a personal decision and is not for every situation. Make sure you understand all services provided and that they are included on all disclosures before you sign.
[1] Ulzheimer, John (2012, June 18). Is Credit Repair Right for Me? [Mint Life Blog] https://www.mint.com/blog/credit/is-credit-repair-right-for-me-062012/Type your paragraph here.