Millions of Americans have unjustified credit scores. Unfortunately, the reporting systems are far from perfect, which results in 20% of scores being unfair. Skewed calculations prevent consumers from getting cheap loans, renting the best apartments, and even getting their dream jobs. Fortunately, mistakes may be removed. Discover the most effective strategies in our guide.
By law, every citizen has a right to dispute erroneous information. Many consumers prefer delegating this job to pros to save time and effort. You can find out more about the best credit repair services on www.creditrepairpartner.com and make a decision based on expert reviews. Fixing the result on your own is daunting and time-consuming.
Begin with Your Goals
What is your status, and how many points do you need to get to the good credit score tier? Note that repair may not suffice. To achieve the best results as soon as possible, you may need to repair and rebuild your history simultaneously. First, check where you stand.
Getting your score is easy — just go to My FICO or download an app like Credit Karma. FICO and VantageScore are the most common methodologies. They have a scale from 300 to 850 and use a similar mix of factors from credit history to new accounts. If you are planning to apply for a specific loan, check the lender’s requirements. Generally, loans insured by the government have a lower approval threshold.
Collect the Information
Next, obtain the data used for the calculations. Go to the only official source — www.annualcreditreport.com. You can download three versions of your financial history — reports from TransUnion, Equifax, and Experian. Engaging all three sources is crucial, as the agencies compile their records independently. Any of the documents may be flawed.
Analyze the Records
Print out the documents for convenience and examine them going line by line. Consumers may spot different types of inconsistencies and mistakes, from misspellings to false information. Underline any details you find suspicious. You may see:
- Accounts that do not belong to you
- Incorrect amounts
- Expired information
- False events
- Absence of positive data
The majority of negative events, known as derogatories, stay on the records for seven years. Chapter 7 bankruptcy is an exception, as it has a lifetime of a decade. Correct items must disappear naturally. Derogatories document your failure to meet financial obligations, which may result in:
- Missed and late payments
- Charge-offs, etc.
Overview of Repair Process
Under The Fair Credit Reporting Act, every bureau is obliged to share only verifiable data. By following a standardized dispute procedure, you may have those errors removed. This is a complicated process requiring patience and expertise. It includes four stages:
- Collection of reports
- Analysis of data
- Preparation of evidence
- Formal disputes
Complexities of DIY Repair
At first glance, fixing your financial history should be easy. You can even find a free dispute letter template on the website of the Consumer Financial Protection Bureau. The required time and effort depending on the severity of your situation. The more errors — the longer it takes.
The collection of evidence is a crucial stage. The bureaus will not remove any details without proof, so you should build a solid case by communicating with your lenders. Evidence includes official documents showing the actual state of your accounts, such as bank statements. The quality of your investigative work defines the outcome of the dispute. If the bureau requires additional information, the process will be prolonged.
By law, every agency must conduct its internal investigation within 30 days, and this period is extended to 45 days in special cases. As dispute letters are sent by certified mail with a return receipt requested, you will know exactly when to expect a reply. As you can see, getting everything right from the start prevents lengthy delays.
Professional Repair: Pros and Cons
Credit repair companies offer a more convenient way to improve biased scores. First, they handle everything for you, from analysis to disputes. Secondly, extensive knowledge of the industry helps them prioritize mistakes to achieve the result more quickly. Thirdly, you may get an array of additional services, from TransUnion alerts to identity theft protection.
The experts will liaise with the lenders, collection agencies, and bureaus. They may send different types of correspondence depending on your needs. For example, cease and desist letters will stop collection efforts, while debt validation letters are used to establish the actual size of your debt.
The only downside is the cost. DIY repair is free. Professional services cost between $79 and $129 per month, depending on the level of repair and the range of add-ons. Some companies also charge a setup fee or a first-work fee in the beginning.
How to Choose a Provider
The most convenient way to fix a score is to use professional services, but these providers are not created equal. Make an informed decision based on a combination of criteria. First, check the BBB profiles of prominent firms in your area. This website provides a wealth of information, from registration details to complaints over the past three years.
A provider does not have to be accredited by the nonprofit. Pay attention to any lawsuits and criticism. You may see whether a company responds to negative feedback and solves the issues mentioned. Even the best providers receive scathing comments from time to time, so evaluate the feedback critically. Check additional sources like Consumer Affairs and Trustpilot, too.
Choose a repair bundle that suits your needs. Some firms provide a free initial consultation, which is a great advantage. The experts will give a tentative evaluation of your case, realistic results, and the time needed to achieve them. Make sure there is a money-back policy, so you will get a refund if they fail to change your score.
Repair or Rebuild?
Professional repair is the most efficient way to raise unjustified scores. If your status is based on correct data, you may rebuild, but not repair it. This means changing your attitude to borrowing, using less of your credit card limits, applying for new credit sparingly, etc. Unlike fixing, rebuilding may take years, so be careful with your financial obligations.