People don’t realize how important it is to have a good credit score. The reason is that your credit score is what people use to determine whether or not you are a good financial risk. When your credit score is low, it is likely that people will not want to do business with you. If they do decide to take a chance on you, the interest rate will be quite high, and this will make your loan, for example, much more expensive than it would be with a higher credit score.
If you have a low credit score, all hope is not lost because it’s possible to improve your score. You have the option of doing it yourself, or you can hire a reputable credit repair company to handle the job for you.
Three Standards of Credit Repair
Before you do it yourself or hire a company, you will need to examine your credit report and ensure that it includes the three standards of credit repair. First, your credit report is required to be fully accurate. It must not have any mistakes. Second, it must also be entirely fair. For example, it must not list one debt in several different ways in several different places. This causes your score to be lower than it ordinarily would be if the debt was only listed one time, and this qualifies as being “unfair.” The last standard that must be met is everything on the credit report should be fully substantiated.
If you discover that your credit report does not live up to the three standards listed above, you may want to invest in credit repair.
Hiring a Reputable Credit Repair Company
You have the option of hiring a reputable credit repair company to help improve your credit score. You will know that you have done so if the representative pulls your credit reports from all three credit bureaus. The credit bureaus Equifax, Experian and TransUnion have different information on you, so each report will be slightly different from the others.
You and the representative will scour your reports for inaccuracies. If you find any, you will need to gather evidence to show that you do not owe those debts.
Were You the Victim of Identity Theft?
Although you can do this yourself, it will be to your advantage to hire a credit repair company if you were the victim of identity theft. Charges that you did not make will be on your report, but there is no way for you to dispute these charges on your own because you don’t have any documentation supporting your claim that you do not owe the debt.
Lastly, your credit repair agency and the credit reporting agency will work together to determine whether an item should remain on your report or not.
Once your credit repair agency has notified the credit bureaus of the inaccuracies, the bureaus will have 30 days to respond to the inquiry. This means that it can take a very short amount of time to improve your credit scores if you use a credit repair agency.
The Do-It-Yourself Option
Your situation may not require that you enlist the help of a credit repair agency. In that case, you can perform credit repair yourself with the help of the Federal Trade Commission.
If you find errors on your reports, you will need to dispute these errors with each individual credit bureau. The Federal Trade Commission has a sample of a letter that you can use to write your own when you are ready to start disputing items. Make sure that you type your complete name and address near the top.
Within the body of the letter, you will have the opportunity to list each item that you dispute and explain the reasons that you are disputing it. Lastly, ask them to remove the inaccurate information from your report. This letter must be sent by certified mail so that you can be certain that the credit reporting agency receives it. Also, send copies of your supporting documentation and keep a copy of your letter.
Hiring a Credit Repair Agency
If you are against performing credit repair yourself, it is possible to find a reputable company that will not take advantage of you. For example, credit repair agencies are not allowed to make outrageous claims about fixing your credit.
The FTC has rules concerning how credit repair agencies must operate. Along with not making any outrageous claims, they also must not charge you before they have finished the task of repairing your credit. In the beginning, a reputable company will make sure that they explain everything to you and answer all of your questions. Furthermore, a good company will take the time to get to know you and your situation. This is the best way for them to determine that the three standards mentioned above are being met by those reporting erroneous data on you.
Lastly, a good credit repair company will be sure to let you know what is and isn’t possible for you. For example, some credit repair agencies will claim to be able to remove all negative credit items, but this statement cannot be true because you cannot remove a negative item if it is accurate.