All too often consumers ask about credit repair…is it worthwhile, what does it cost, should I sign up? Credit repair is a service provided by a company that helps consumers remove unwanted and inaccurate information from their credit file to help improve credit reports. Consumers can hire a company to clean their credit or just as easily can sign up to do the work themselves.
Consumer agencies report that 1 in every 5 consumers have errors on their credit report. Errors are typically damaging to your report and credit score and should be fixed. A lower credit score inevitably means higher interest rates and less financial opportunity, making it worthwhile to review and fix your credit. Under the Fair Credit Reporting Act (“FCRA”), the federal statute enacted to protect your rights in the dissemination of your credit information, you have the right to dispute inaccurate information on your credit report. The FCRA allows you to request an investigation into the inaccurate information and to ask for the information to be deleted or updated accordingly. Credit repair companies are in the business of writing and sending those disputes for you.
Should you decide to dispute inaccurate or outdated information on your own credit report or to hire an agency to do credit repair on your behalf, the process works the same. Information you should dispute includes inaccurate account information, accounts that do not belong to you, duplicate accounts, inaccurate personal information such as the spelling of your name, address, employment history and outdated information that is beyond the legal reporting limit. Hiring an agency to clean up your credit means you pay a monthly fee (tending to average around $100) for the agency to dispute all of your inaccurate information. The process may take up to a year to fix with a credit repair company or just a few months on your own.
After the credit repair company receives all of your information regarding what is inaccurate on your report, it will draft a letter to the credit reporting bureaus on your behalf to dispute the information. Credit reporting agencies have 30 days to conduct an investigation and respond. Once a response is received if you or the company are not pleased with the results, it can continue the disputing process or you can chose to file suit under the FCRA with an attorney.
Should you decide to use a credit repair company, make sure you look into its reputation. The credit repair industry is known for bogus companies that will promise to delete accurate negative information, a guarantee that cannot be made. A rule of thumb to remember when hiring a repair company is that the company does not have more rights than you…be wary of any and all unrealistic promises. Under the Credit Repair Organizations Act, you have the right to cancel your agreement with a credit repairer, money back, within 3 days of signing any contract.
If you are in need of any information regarding your credit report and the dispute process, contact SmithMarco P.C. for a completely free case review.