Get your credit reports from all three credit bureaus, review them and dispute items that can be disputed. It is that simple. We expect you to find this answer less than satisfactory. If you are struggling because of your bad credit score, you want to know more. So, let’s see how does credit repair work.
How do credit repair companies work?
Credit repair companies work to improve your credit score. A better credit score puts you in the position of a responsible and reliable borrower. When you approach a credit repair company and sign a contract, a credit repair specialist gets your credit report and review it. He looks for errors or any other information that can be disputed. Once a dispute is filed, credit bureaus investigate the disputed information and make corrections it is a legitimate inaccuracy. Even you can review and dispute incorrect information. However, in addition to disputing incorrect information, credit repair companies use other ways as well for improving your credit score.
For example, a credit repair company can negotiate with lenders or creditors and request them to get a late payment removed from your credit report. They can also write an effective goodwill letter to remove a late payment.
However, you should know that credit repair companies and credit counseling agencies are not the same. Credit counseling agencies are usually free resources. These are financial education organizations that review debt and credit reports and finances. The goal of these agencies is to educate you so that you can manage and improve your financial situation. Keep in mind that when you are working with a credit repair company, you have to be aware of scams.
How to verify if a credit repair company is a scam or not?
It is not difficult to spot a fraudulent credit repair company. Following tips can help you in finding an honest and trustworthy credit repair company:
- Visit the website of the Better Business Bureau and check reviews of the company.
- Go through the database of the Consumer Financial Protection Bureau.
- Check user reviews and ratings on other websites as well.
The following tips can help you in avoiding fake credit repair companies:
- Don’t work with a company promising to remove negative information from your credit report.
- Avoid anyone claiming that he can create a new legal identity for you.
- Stay away from a company asking for money before providing its services.
- A fake credit repair company guarantees improvements in your credit score.
Before you look for a credit repair company, you should work with a credit counseling agency.
In order to improve your credit, a credit repair company gets your credit report, reviews it and creates a plan. This plan includes validation of information, writing letters to dispute errors and inaccurate negative information and writing cease and desist letters to collectors on your behalf.
