Before we answer the question, “Do Credit Repair Agencies Work?”, let’s understand what exactly the term means, credit repair.
After all, if you are reading this article you are most likely experiencing some issues with your credit score and are looking for some answers on how to improve it. I hope you are looking for legal ways to improve it.
Please keep in mind that there are some real bad apples out there that will tell you that they can remove all the negative information from your credit report. But, before you jump in with both feet, please remember that if the information on the credit report is true it is nearly impossible to have it removed legally.
What does the term credit repair mean?
So, what does it mean to repair your credit, and do credit repair agencies work?
Repairing your credit is a tedious process of challenging any negative reports on your credit report to make the companies that reported that information verify that it is true with the Credit Reporting Agencies.
As an example, if you had a vehicle repossessed because you failed to make payments it is virtually impossible to have that removed from your credit report legally. We’ll talk a little later about how you can challenge the report they provided to the credit reporting agencies.
As another example, if your credit report shows that you never paid off an installment loan, but you have a paid in full statement from them, that would be a perfect example of being able to have this legally removed.
Do Credit Repair Agencies Work and What Do They Do for You?
The short answer is that ethical credit repair agencies can provide a very valuable service for those that need help with navigating through the legal process. Think of them a lot like an attorney if you were charged with a crime. They are your advocate for helping you challenge each and every negative report a lender has made against you. Anyone that promises you that they can remove all negative information, even the true information, do not use them since it could be illegal.
It is important to understand that agencies are regulated by a law referred to as Credit Repair Organizations Act. Also known as CROA. Here are some of the key parts that are included in the CROA; 1) The Credit Repair Agency must provide a written contract that spells out the specific services they will be providing, 2) They must provide you at least three full days to cancel and withdraw from the contract you entered with them, 3) Must never ask you to make any false claims which could place you at risk of credit fraud, 4) They are not permitted to receive any payment for services until they have fulfilled the terms of the contract, 5) They can’t promise to remove anything that is true and accurate on your credit report in exchange for payment.
What a reputable credit repair agency will do after you have entered into a contract with them is pull your report from all three credit bureaus and then identify what is considered negative. Once they have done this, they should review the report with you to confirm what is true and what is not true. If it is not true, they will ask for any proof you have that supports your belief that it is not true.
At this point they will contact the credit reporting agency, either Equifax, Experian and TransUnion, and challenge the information including any proof you have provided. Then the lender that reported the negative information has only a certain amount of time to validate the information back to the credit reporting agency or the negative information will be removed.
Remember, it is illegal to misrepresent any information that is not true just to possibly have the negative information removed. In other words, you can not say that you never had a loan with a certain lender, or made all the payments on time, if it is not true.
So, do credit repair agencies work? If you are truly trying to clean up your credit report and need help doing so, yes, they do.
Best Ways to Improve Your Credit Score
The very best way to improve your credit score is to pay your bills on time! I know that goes without saying, but you would be amazed at how many people blow off paying their bills on time because the simply forget. Don’t forget!
Set up a budget and stick to it! When I say to set up a budget include everything, and not just your bills. As an example, make sure you include; 1) Gasoline money for your car to get back in forth to work or for pleasure trips, 2) Tithing to your church, 3) Food to eat, 4) Savings for a trip or retirement, and 5) Spending money.
Thank you and may God bless you!