If you are planning to take out a loan from a lender, you need to have a good credit score in order for you to qualify for such a credit. If you do not have a good credit record, you may have to build back your credit score for the better. This is not always a difficult thing for those who know how to go about it. You can now get help with your credit score if you consult the credit repair companies. These are companies that help individuals with bad credit scores to correct their scores for the better. Credit reporting errors are some of the things that contribute to bad credit. When you engage a credit repair company, they go through your credit history and investigate what could be causing your poor credit scores. Once they know where the problem is, they then work on it and make the necessary corrections.
What do credit repair companies do?
Credit repair companies exist to help people with bad credit records to repair it. The companies communicate with third parties that report your credit information to the bureaus. These are companies such as debt collectors, credit card companies, or banks. The belief here is that these third parties may have furnished the bureaus with incorrect information. The credit repair companies will have the credit information furnishers delete or modify such information in a way that favours you and improves your credit score.
Credit repair companies will mostly jam the credit bureaus with endless mail challenging the information supplied by the furnishers. When this is done repeatedly, the lender may fail to process such letters within 30 days and eventually delete the account. This works to the advantage of the person with a poor credit score.
Credit repair companies can work on 3 ways to help correct credit report errors. Here are the 3 steps:
- Request your credit report from the bureaus
- Review credit reports
- Dispute the errors and have them removed
Step 1- Ask Bureaus for your credit report
This is the first step the credit repair company takes. The idea of the credit repair companies helping you is that they need to spot errors in your report. This is why they first need to write to the 3 credit reporting bureaus. These are Equifax, TransUnion, and Experian. There are many items that a credit repair company wants to check from the credit report. These are issues such as the credit collection accounts and also spotting errors that you may have missed. When the credit repair company gets the report from the 3 bureaus, they take time to review it and spot errors and other issues that could have contributed to your poor credit score.
Step 2- Review the credit report
The credit repair company will take time to look at your report and find any negative items that cause you low credit scores. This is because according to federal law, all items on the report must be verifiable. The law allows a creditor or credit bureaus 30 days to respond to issues about your credit report. Therefore, for every negative item your credit repair company spots, they can send letters to the creditors and credit bureaus. If there is no response to the letters so sent, then such negative items are removed from your report. This, therefore, helps you to have a better credit report.
Step 3- How to get a less negative report
The next step entails having the errors removed. You can also call it a negotiation for a less negative report. What this does is that it helps you to gradually get a better report and hence qualify for credit. Once your credit repair company has contacted the data furnishers, they will either respond or fail to respond. This will have the disputed information removed from your credit report in the event the furnishers do not respond. If the data furnishers respond to the claims, you can negotiate with them for a better report. Some of the creditors are ready to change the information they furnished to the credit bureaus. Here, you will need to settle debts that are due. The good thing with the credit repair companies is that they are experienced and know which creditors can be approached and which cannot.
The credit repair companies can negotiate what is called a pay-for-delete agreement. You can also have the creditors remove your late payments once the account is paid. All these are settlement schemes that can have your credit score improved.
