Has your application for a loan been rejected? Are lenders offering higher interest than you hoped for? Your FICO score must be to blame. Unfortunately, not only people with bad credit come across as risky borrowers. Mistakes on credit reports drag down the total, making loans inaccessible or expensive.
Here is the good news: they are fixable. However, the repair is not quick. You may try doing everything yourself, which is a challenge. To clean the reports, you need to gather evidence and communicate with bureaus and lenders. Credit repair companies can do the job for you. Check this comparison by Gerald Dunigan from CreditFixed.com to identify trusted providers in your area. Here is how they work.
Delegating to Professionals
Most providers offer 2-3 service bundles, as their customers have cases of different complexity. Usually, your costs include an upfront fee and a monthly subscription charge. Thus, the more mistakes — the longer the process and the higher the total.
The best providers have money-back guarantees — sometimes, even unconditional. Often, you may request a refund if the company fails to remove any items within the first 90 days. Here is how the work is structured.
1. Collection of Information
In the beginning, you may get a free introductory consultation. The company will pull your reports from all major agencies — Equifax, Experian, and TransUnion. As different lenders exchange information with different bureaus, you may never be sure whose report is the culprit.
The experts will carefully examine the data to identify false information. Next, they will collect evidence to prove that these are inaccuracies. This information is used to write formal letters to the bureaus.
2. Disputing the Errors
Your representatives will send customized dispute letters to the agencies, liaise with your creditors and collection agencies. The services may also include goodwill letters to lenders and cease and desist letters to collectors, so they stop bothering you with phone calls.
Meanwhile, you should be able to track the progress on the official website or through an app if there is one. The company may also provide regular phone calls to keep you updated.
Note that different service packages include different numbers of disputes per cycle. For example, you may be allowed to dispute 10 items every 45 days. As usual, in premium packages, these restrictions are lifted.
3. Getting the Results
After the bureau receives a dispute letter, it has 30 days to work on the request and reply. It will either eliminate the items in question or request additional supporting information. When inaccuracies are removed, your FICO score improves automatically. Borrowing becomes more affordable.
This is only the first step in repairing your credit. Additionally, the firm may offer educational services to help you manage expenses better. Prudent budgeting and debt management are crucial. Today, this topic is popular — there are plenty of tips on how to fix a credit score and borrow responsibly. Through financial planning, you avoid poor decisions that cause bad credit.
Doing Everything Yourself
By law, every citizen of the United States may get a free copy of their report from every bureau annually. In theory, you may fix the score without representation: collect your reports, analyze them, gather evidence, and dispute the mistakes.
You can download a copy of each report. Then, scrutinize the documents line by line to find any inconsistencies. Collect bank statements and other evidence proving that these entries are false. Next, draft and send your letters to credit bureaus. You can also find sample letters on the official website of the Federal Trade Commission.
Please note that if the agencies request additional information, the process takes even longer. Overall, it is a complex and drawn-out procedure. If you have no experience with credit repair, navigating the laws and subtleties of formal communication is a hassle. If there are multiple false items, allow yourself between six months and a year.
The Bottom Line
Anyone can fix their credit score if their reports contain false entries. However, it is a difficult and long procedure. This is why credit repair services are so popular. If you have no time to dissect your own reports and write formal letters, delegate the job to professionals.
Be careful though, not all companies may be trusted. Look at BBB ratings, customer reviews, and expert opinions to identify the most suitable provider and service package for your case. Top firms do not just repair your credit. They provide convenient score monitoring tools and educational resources, so you can learn to track and manage your finances better.