Should I have someone fix my credit for me?
Are you thinking about contacting a "Credit Repair" company? Or maybe you're already paying for Credit repair services? You might want to rethink your decision.
Credit Repair companies are popular because they claim that they can “clean up your past” or “fix your mistakes.” These kinds of vague promises are understandably appealing - it’s like they have a time machine, but one that specifically takes you back in time to erase stupid stuff you did with money. While wanting to improve your credit is a great thing, using a time machine is not a real option *yet*. Here’s what you need to know about Credit Repair...
The 411 on Credit Repair
Credit Repair companies, in short, are companies that promise to fix your credit for you. They claim that they have the magical power to remove negative information from your credit reports, thereby improving your credit scores and also making you 15% more physically attractive. J.K. about that last part. In reality, they do something that is both free and easy. Credit Repair companies’ sole function is very simple: they file lots and lots of “disputes” against information on your credit reports. That's all they do. In order to explain how completely absurd this is we have to have a little talk about what disputes are.
Side Note: It’s easy to confuse Credit Repair with Debt Settlement companies. Debt Settlement companies do something much more complicated and alarming. We’ll talk about them in a separate article.
Hop in the Delorean Marty, we’ve got some credit mistakes to erase.
What’s a Dispute?
Have you ever found incorrect information on your credit reports? Maybe a family member’s social security number is showing on one of your reports, or there’s a collections account that you know isn’t yours. These kinds of credit reporting errors are pitifully common.
According to the law, every consumer has the right to have errors removed from their credit reports *weird how we need a law for that*. Whenever you find information on your reports that you believe to be incorrect, you can exercise your right by filing a “dispute”. Filing a dispute is 100% free and it’s really, really easy. So easy that you might as well do it yourself. I’ve done it before and it took me about 5 minutes.
How Do I File One For Myself?
You’ll first have to locate the instructions on your credit report (here’s how to get all three of your reports for free if you need them). Every credit report includes a section with dispute instructions, along with other disclosures about consumer rights. You’ll usually find the info near the first or last page of your reports.
What you’ll see in said instructions is that you can file a dispute by sending a brief written statement to the credit bureau, either via snail mail or online. I tried the online option myself since I know how the internet works. In short, you just go to the credit bureau’s website, answer some security questions to verify your identity, and submit a brief statement about what was wrong with your report. In my case there was a collections bill for a medical service I had never received.
Credit reports are like a box of chocolates. You never know what sh*t you might find inside.
Pro Tip: When filing your dispute make sure you focus on factual evidence. Including records is the best way to make your case. Your written statement should read less like, “This info is wrong!” and more like, “I did not incur X bill on X date as evidenced by X document I’ve attached.” Here’s a great template to use.
What Happens After I File?
When you file a dispute the credit bureau is obligated to investigate your claim within 30 days and then send you a written response. If they cannot verify the information on your credit report then they have to remove it… at least until they can find the information they need. This is the loophole that Credit Repair companies take advantage of.
Instead of disputing incorrect information, Credit Repair companies dispute every negative item on your report. By overloading the credit bureaus with disputes, they sort of jam up the system. The credit bureaus usually don’t have enough resources to investigate their slew of claims. Thus your negative information is removed, but only temporarily.
Those erroneous disputes are gonna come back to haunt you!
But Sarah, I’ve Had Great Results With a Credit Repair Company!
I hate to be the bearer of bad news but the results may not be what you think they are. I’ve worked with a handful of people who claimed that Credit Repair was working for them. Unfortunately I had to advise them that the fix was only temporary.
Once the credit bureau locates your accurate information, it will reappear on your reports. In other words, you can’t simply dispute your way out of missed payments or collections accounts. These things can only be fixed with time or money. Contact me if you’d like to figure out what your best options are.
Bow down to me, lowly Credit Repair Company.
In Summary, Credit Repair Companies Are Not WortHY
If it’s not already clear, Credit Repair companies are completely unnecessary. It takes more effort to contact a Credit Repair company and set up service/payments than it would take to file disputes on your own. Plus they’re an expensive and temporary fix.
In full disclosure, I harbor a bit of personal resentment against Credit Repair companies. They distract people from working with qualified professionals *like me* to make real credit improvements. Want to compare the information I've shared to info from an unbiased source? The Federal Trade Commission and the Consumer Financial Protection Bureau have written guides on avoiding Credit Repair companies and how to get good help with your credit.
As always, I love hearing your questions and comments.
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