What is credit repair? Credit repair services use the laws around credit reporting to contest derogatory  items on your credit report. They are most effective at removing errors or misinformation from your credit report, but can also be used to find derogatory information that can easily be removed because it violates the rules and regulations around credit reporting.  Credit repair services will send legal documents contesting the information on your behalf to the credit bureaus. If the bureaus cannot authenticate the information, it will be removed from your credit report.

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Does credit repair work? It depends on what is in your credit report. If all of the negative information in your credit report is accurate, a credit repair service may not be able to have any of it removed. Remember, only false or invalid information can be removed from a credit report. There are ways that a credit repair service can work with your creditors to remove certain information from your credit report, such as late payments, but overall it is not easy to get accurate information removed from your credit report.

Having a good credit report means it will easier for you to get loans and lower interest rates. Lower interest rates usually translate into smaller monthly payments. If you have not checked your credit report for years, there’s a good possibility that there may be inaccurate information on it that can be contested.

 Repair Your Credit Yourself

Repairing your credit yourself is not difficult, but can be very risky. Credit repair services have an unique advantage because they understand the legal requirements behind credit repair and they also ensure that your rights and credit reporting laws are not being violated. In repairing your credit yourself, you should have some understanding of these laws, have access to these legal documents, must be very well organized and have patience. If you do not have your credit reports before you, you should probably get them now.

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Although you can’t erase all of the bad information, there are some steps you can take to make your credit situation better.

Correct any errors on your credit report. You have the legal right to dispute and correct inaccurate information on your credit report. You can send a written dispute to each credit reporting agency that has reported inaccurate information. By law, they must investigate they entry, correct any mistakes, and respond to you within 30-days. Afterwards, you should obtain another copy of your credit report to confirm the corrections. Then you should also send the results of the investigation to the other credit reporting agencies.

Get help from your creditors. Filing a dispute with the credit reporting agency can delete unverified information about debt, but not if the creditor insists that you owe them money and verifies that fact with the agency. Now, you have to convince your creditor that there is an error. Supply whatever proof you may have to your creditor. If it’s insufficient, then you may have to agree to pay part or all of the debt, immediately or in installments. If so, be sure to get written confirmation of the agreement, and that the negative information will be deleted.

Remove student loan defaults. If student loan defaults are hurting your credit, take steps to remove them. If you qualify for certain loan discharges, then the fact that you were ever in default of a student loan can be deleted from your record. For more information on resolving defaulted student loans, visit the Student Loan Borrower Assistance Project at: www.studentloanborrowerassistance.org

Clean up public record information. Information in your public record can sometimes be the most damaging. This includes arrests, convictions, judgments, foreclosures and tax liens. The best way to remove such information is to start at the source – with the government agency providing the information to the credit bureau.

Delete old information. Most negative information has to be
removed from your credit report after a certain number of
years. Here are the basic guidelines:

After 7 years
– Accounts sent for collection or charged off
– Lawsuits and judgments
– Paid tax liens
– Most criminal records

After 10 years
– Bankruptcies

Forever (may be reported indefinitely)
– Criminal convictions
– Positive information

Explain damaging information. You can send a statement to the
credit bureaus explaining damaging items. They are not required
to include the statement in your report, but they might agree to
do so. For example, if you were sick and unable to work for three
weeks and your creditor agreed to postpone your payments, then
the bureau must include a statement as such. Keep your
statement short.

Avoid overreacting to threats. Creditors may threaten to report
negative information to the credit bureaus, but this is just meant
to pressure you to pay. (See our book, When the Bill Collector Calls). In reality, that information is automatically reported every month no matter what. If the threat is coming from a collection agency, the threat is even less likely to make a difference. That information is also automatic. But if the collection agency is making threats, you have a right to sue the collection agency under the law. (See our book, When the Bill Collector Calls).

 Don’t Get Scammed

 Thinking, tired or ill with headache business woman

Not all credit repair services are legitimate. Many of these so-called repair agencies are scams. They’re in newspapers, on the radio, TV and internet, and they promise to erase accurate negative information in your credit report. If they’re telling you they can create a new credit identity for you, it is most likely illegal. If you participate in this fraud, you can be prosecuted.


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There are many rules that the FTC imposes around credit repair services, and not all companies follow those rules.  These businesses can be checked out through the Better Business Bureau and your local consumer affairs office to see if there have been any complaints filed against them.  Debt Wise Solutions tested many credit repair services and makes our recommendation based on pricing, services offered, reliability and customer service.   

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