Last Updated on July 11, 2024 by Asfa Rasheed
Table of Contents
What is a Credit Repair Company?
Credit repair is correcting errors on your credit report that have caused you to have a bad credit history and trouble getting credit and loans. Credit repair companies help you fix credit reporting mistakes such as late payments, closed accounts, negative information, no payments, and other negative information you have had on your credit report.
There are different types of Credit Repair Companies, some help you dispute errors made on credit reports, and others help you correct your credit report by looking at ways of improving your credit score. Other credit repair companies they provide: include removing collection accounts, repairing damaged or bad credit reports, finding information about your financial history, negotiating with creditors to remove incorrect records and liens on your credit report, and reducing or settling debts. All this is done to fix bad credit.
How Do Credit Repair Companies Fix Credit Reporting Errors?
A credit repair company is charged with helping to resolve the negative information on your credit report by taking illegal or unfair accounts off your credit report. The law requires your creditors and their reporting agencies to contact you before they change any details relating to your credit account.
If you want to dispute errors and items that are incorrect, you need to request a letter disputing the items on your credit report. These letters usually come from you, a lawyer, or the creditors themselves. The credit repair company will work with you and try to get creditors to remove negative information on your credit report. The credit repair company will contact the credit reporting agency and negotiate with them to remove negative information from your credit history.
The credit repair company will take the dispute letter from you, and the creditor reporting agency’s response, often called a coordinate letter, and then attempt to resolve disputes on behalf of its clients by writing letters requesting deletion or changes in negative information.
What are the Different Types of Credit Repair Services
1. Goodwill letters to creditors.
The company will work with you to write a letter stating that you were made a victim of identity theft, that this information is false, and requesting that the creditor remove it from your credit report.
2. Dispute letters to creditors.
The company will create a brief document for you describing the situation about the negative information on your credit report and then send it to the credit reporting agency. You will also have to sign the letter and include your Social Security Number, current address, and a copy of your credit report. The credit reporting agency has 30 days to respond to this dispute.
3. Elimination of all negative information on your credit report.
The company will dispute every item on your credit report until they get it removed. They will find mistakes, errors, and negativity and try to remove them all from your credit report by writing letters of dispute and sending it to the credit reporting agency that reported the information as incorrect.
4. Disputing errors and dispute credits.
The company will work with you to dispute the information on your credit report, so it is more accurate. They will also negotiate with creditors reporting information about your account inaccurately or incorrectly, allowing them to re-write those accounts, letters, and documents that are wrong and have been reported to them.
5. Removal of late payments.
Late payments on your credit report will stay there for up to seven years and can damage your credit score. A credit repair company can help you remove this negative information from your report if it has only been a few months.
6. Removal of old accounts.
Old accounts that are still reported on your credit report can be removed if they have been closed for at least seven years and have not been re-opened within that time frame. It can take up to seven years to remove negative information on your credit report unless the creditor reports it again.
7. Elimination of collection accounts.
Collection accounts are usually written about negatively because they show that you have an outstanding debt or bills and may damage your credit score if it stays on your report for a long time.
8. Eliminating late payments and derogatory accounts.
The credit repair company can eliminate late payments and derogatory accounts if they are only several months old. You will need to provide them with proof of the payment.
9. Settling debts with creditors.
Negotiating with creditors to get your debt reduced or settled is another way of fixing a bad credit report and getting rid of negative information on your credit report that has been there for many years.
10. Improving your credit score.
A credit repair company will work with you to improve your credit score by removing negative information or working with creditors to reduce the debt on your credit report.
11. Positive information that is reported on your credit report.
There are many ways of having positive information on your credit report and improving it, including getting a bigger loan or a larger monthly payment plan and having a larger down payment if you are buying a house or car.
12. Order a copy of your credit report.
A credit repair company will order you a copy of your credit report, and you can dispute all the negative information on it. You must know precisely what is on your credit report and which company the damaging information is coming from.
13. Allowing you to dispute incorrect items on your credit report.
A credit repair company will allow you to dispute incorrect and illegal items on your credit report, such as identity theft accounts and other types of fraud reported on your credit report. They will also help you to fix bad credit.
The credit repair company will help you improve your credit score and fix any information you may have reported inaccurately or truthfully on your credit report. Daily Prosper is a great place to find information about credit repair for low income families.
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