Credit Repair Guide

When Do I Need to Seek Professional Credit Repair Services?

In the last section, we talked about the logistics of credit repair. You should now know about how long credit repair should realistically take you and what the components of effective credit repair are. You might have even taken a look at your own credit history and have an idea of how manageable your credit repair seems without a credit repair company. In our last portion of this guide, we’re going to discuss what kind of a ride you might be in for if you choose to do your own credit repair. You’ll know exactly how credit repair agencies might be able to help you, what rules and regulations they operate under, and what kinds of results you can expect.

In truth, your credit report is the same no matter whether you, a lender, or a credit repair company is looking at it. Likewise, you are perfectly able to go through your history, write to the rating agencies, and coordinate with lenders or credit card companies to set the record straight and get your credit score back where it belongs. However, that can be a long, difficult, time-consuming process. Just as you can self-represent in court, you can fix your credit on your own, but you’ll get better results faster if you work with the pros.

Who Are Legitimate Credit Repair Companies?

First, we want to explain exactly what a credit repair agency isn’t. We’ve talked a bit about the fact that scam companies often operate in the realm of “credit repair,” but let’s go a little bit deeper than that. Legitimate credit repair agencies are regulated by the Credit Repair Organizations Act. This means that there are a lot of rules and regulations specifying what they can and can’t do for you.

  • They must provide a written contract detailing their exact plan for your credit repair.
  • They must give you time to look over that contract and agree to it, or not.
  • They absolutely cannot engage in any acts that could alter your identity or steal another person’s identity.
  • They must do everything within their power to protect you from crimes like credit fraud and identity theft.
  • They are not allowed to take any payment until they fulfill all of the terms of your contract.

We think it’s important to “de-mystify” the world of credit and credit repair before we dive into what credit agencies might be capable of accomplishing for you. You’ll need to have trust that a company can do what you need them to do and not send you further in the wrong direction. Now that you understand what a legitimate credit repair company’s rules and regulations are, let’s dive into exactly why they could be beneficial to use instead of handling it yourself.

What Does a Credit Repair Agency See That I Don’t?

A credit repair agency doesn’t see anything differently on your credit report than you do. They don’t have special access to unique, more classified information, or a special report. Unlike the layperson, however, they do know exactly what they should be looking for. They’ve seen mistakes on credit reports, such as duplicate items, and they know which negative credit items need immediate attention.

Start With Your Free Credit Report

In addition, they’ll encourage you to take a look at your own free credit report and see what areas might be lacking. After you do so, you can sit down with your credit repair agency and start to form a plan for fixing your credit score. For example, you might already know that you’ve got some late payment issues that you need to deal with. You already know that late payments make up a large percentage of your credit history and credit score. You can express this fact to your credit repair agency and devise a plan to consolidate your debts or coordinate with lenders to make your payments more manageable.

Taking Stock of Debts and Negative Items

Looking at late payments, your total debts, and knowing where to start is intimidating. Even though you know that late payments are an issue for you, where do you begin? Which payments do you focus on first? What if you don’t have enough money to pay them all off right now? Don’t fret! The credit repair agency will sit down with you and discuss all of the late payment issues affecting your credit score. They’ll be able to tell you exactly which payments are having the largest effect on your score, then you can form a plan of action and begin to remedy the largest areas of concern first.

What Can They Do That I Can’t?

The answer is simple: credit repair agencies are professionals, and the rest of us aren’t. They are trained and have years of experience in credit repair. Knowing who to talk to, what the legal timelines are, and what process to use can be quite confusing and laborious when dealing directly with credit bureaus. Not to mention, the repair company will commonly tie up all loose ends for you. That doesn’t just stop at fixing errors on your credit report; they may coordinate with lenders, debt collectors, and credit card companies in order to clear your name and improve your score.

Identity Theft Recovery

This comes in particularly handy if you happen to be the victim of identity theft. If you’re one of the millions of individuals who have had their Social Security number stolen or their credit card information leaked, you could be in a tough situation that seems impossible to recover from. Many credit repair services offer identity theft repair services that can help turn around an awful situation much faster than you might be able to do so yourself.

This is nothing short of a marathon process that requires coordinating information from multiple angles at once. Many individuals aren’t able to catch identity theft in its stages of infancy, which means you may already have several loans, credit cards, and fraudulent accounts opened in your name. The credit repair agency has to work with you and each individual bank or lender to resolve the issue, and report that information quickly and accurately to all of the credit bureaus in order to revise your credit report. This also entails gathering evidence to prove that the accounts and individual purchases on them are fraudulent and reporting all of that intel back to the lenders and credit bureaus as well.

Personal vs Business Credit History

Another scenario that many Americans find themselves in involves mixing personal finances with business. Is your credit score suffering due to a mess of business loans? Maybe a startup that didn’t quite launch as you expected? Many individuals choose to take out business loans in their own name instead of a business account, which isn’t a horrible idea in the beginning, but it can have some nasty repercussions if things happen to go south. Think of it this way: your credit score is now dependent not only on your own financial habits, but the habits of your entire business. Small business owners might not even know that their credit score is suffering until it’s too late. This is where professional credit repair comes in.

What Kind of Results Can I Expect From Professional Credit Repair Services?

Of course, each experience will differ depending on your credit situation. In general, with a professional service you can expect an overall smoother, faster, and cleaner route to fixing your credit than if you were to try and manage it all yourself. You can expect credit repair agencies to find minute details that you may have overlooked on your own. This is especially helpful for those of us who are really trying to get that extra boost out of our credit score. This could bump you right up to where you need to be in order to qualify for a loan, such as for a new car.

Credit Repair Timeline and Goals

If you decide to go with a credit repair agency, they’ll set down a guideline for how long it should take and what kind of realistic goals you should expect before you ever get started. Exceptions may occur and you’ll need to be prepared for the plan to change a bit if the unexpected happens, but for the most part you’ll know what’s in store and what is expected of you. This is another reason we suggest simply talking to a professional about your credit: You’ll know what kind of challenges you might be up against before you really get the ball rolling. You’ll know if rebuilding your credit sounds like a feasible thing to do on your own or if a professional can help you get where you need to be, faster.

In addition, with a credit repair agency, you can set a tangible goal according to your financial plans. For example, if you’d like to buy a home in three to six months, you’ll know if that’s a realistic goal after speaking with the credit repair company. If you know that you’ve got some major mistakes to deal with, your agency might tell you that one to two years might be a more realistic goal before you will qualify for your dream home.

Saving Time and Energy

It’s not something that you can’t do, it’s just something that is incredibly time consuming. To the untrained individual, it could turn into a much lengthier and more complex situation than it needs to be. If you’ve taken a look at your credit report and you’re confident that you can resolve some of the major issues somewhat quickly and easily, go ahead and do it yourself. We’ve provided letter templates for some of the more common scenarios related to credit repair and dealing with collections.

However, if you don’t want to trudge down that deep, dark rabbit hole that is credit history, it might be a smart idea to leave it to the professionals.

We hope you’ve enjoyed this in-depth look at credit scores, credit history, and credit repair. If you’re unsure about any of these aspects, please go back and read our other installments in this series. Our goal is to help you make your own informed decisions about your financial wellbeing. No matter where you are on the credit score spectrum, you’ll likely benefit from credit repair. Jumpstarting a credit repair plan isn’t easy, but you now have the tools to read your credit report, address your credit history, and repair your credit score.

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