Blame it on meltdown or the thousands of layoffs happening around you, credit scores are falling, homes are getting foreclosed and the entire economy is moving with a snail pace. (We’ve left the turtle behind long ago!) The entire nation is blazing with S.O.C (Save Our Credit) calls and not many are able to get the required help. If you are one of those honking for help, then, this guide is just for you.
Wondering how to repair your own credit? Well, the truth is that, unlike your car or a clock, you cannot repair your credit in a single day. It takes a good deal of conscious effort and time to resurrect your fallen credit and this undoubtedly, only you alone can do. Your credit score dictates your financial viability and where exactly do you stand regarding your finances. Without a proper credit score, you cannot buy property, grab a loan or even get a good job at times. Then, why on earth should you leave your credit in a state of repair!
Credit Repair refers to regaining your fallen credit score and improving your financial status. Some guidelines for credit repair are as follows:
- Seize Control: Grab a report of your credit from any or all the three of the major Credit Bureaus - Equifax, Experian and TransUnion free of charge. But, if you have few bucks to spare then you can opt for a paid credit report from any third-party agency. Study the credit reports carefully. Go through each and every detail of the credit report and see if all your personal information and credit information has been documented in the right manner or not. See if there are any accounts or payments that you’ve no knowledge about.
- Rake Hell: If you find any errors in your credit report, report it immediately to the concerned Credit Bureau. The bureau will get back to you with necessary information after a while. If you still find it unsatisfactory, rake hell and pursue the whole matter with vengeance until you succeed. Get down to specifics while reporting the errors in your credit report. Substantiate your stand by providing enough evidence. Simply, negating the alleged charges is not going to help. Remember, even a small gaffe can result in the tumbling of your credit score and you might even end up losing prospects for low-interest loans and good jobs.
- Credit Clinics: Some people rush to credit clinics anticipating them to perform a miracle and set their credit straight overnight. Visiting a credit clinic is similar to visiting a rehabilitation center. If the individual is not ready to give up his addiction, then the treatment given by the rehabilitation center is just minimal and will not last for long. Unless, you make an honest and conscious endeavor to improve your financial lot, there is nothing much these credit clinics can do for you. They can only devise a proper credit payment plan for you to follow. What if, if you fail to follow that plan?
Credit Repair Services
Credit Repair refers to setting your tumbled credit record straight. In other words, it means improving your credit score by removing errors and negative entries from your credit report. Though the word credit repair sounds simple, the actual process is time-taking and full of several twists and turns. It definitely cannot happen in a day or two and you should have enough energy and patience to pursue the repair till the end.
- Bad Credit vs. Bad Image: Do you know that your credit record gives away more than your face does? Your credit record decides your fiscal status, privileges and the special benefits that are in store for you with lenders and banks. If you have a bad credit record, then, you are a dead meat. No bank or employer would want to associate themselves with somebody who is diving deep into the dungeon of credit. A toppled credit history will definitely affect your eligibility for a loan, your employability and even the premium you might have to pay your bank (Yeah! Banks wouldn’t trust you anymore) and you will have to face that mixed look of suspicion & pity from everybody you are dealing with financially.
- Hire Help: Often, people cannot solely depend upon Credit Bureaus for correcting their credit reports. In fact, Credit Bureaus work in a limited sphere and do not really care if there are any errors in an individual’s credit report, whether his credit score is getting affected or not. Their job is to document the credit data pertaining to an individual alone, which they do it diligently. So, now, it’s up to the victimized individual to look for an extra source of help that can help him deal with the loads of paperwork, umpteen days of anxious wait and re-disputing the errors that have not been erased etc. Not many of us might be able to afford time and energy for such an ordeal in our life. In such a situation, hire a credible credit repair agency that can deliver in reality what it promises to give.
Now you know why hundreds of credit repair companies are mushrooming up every year! Credit Repair is a business where many companies resort to and claim to perform the miracle of boosting up one’s credit score by several hundreds (sounds unreal right!). For availing Credit Repair services you need to pay a good amount of fees and keep in constant touch with them for the regular updates of your case.
- Flags of Alert: Not everything is rosy about Credit repair shops, often ridiculed as credit clinics. Most of them make irresponsible claims like improving your credit score by several hundreds or removing the bankruptcy entry record from your credit report etc. Stay away from such credit repair services because they are saying anything but truth. According to law, no body can erase an already entered bankruptcy entry or a delayed payment entry etc from a credit report. No individual, credit bureau or a credit repair agency has the power or eligibility to do so. It is genuinely forbidden by law and there is absolutely nothing you can do to alter, to modify or to completely erase it from the credit report.
Things To Do
All said and done you’ve decided to try your luck with a credit repair service and are searching for one. To avoid the risk of ending up with a wrong credit repair agency here are some tips for you:
- Never trust a credit repair agency that promises the impossible (like deleting negative entries etc).
- Snoop around a bit about and gather information about the credit repair agency you are planning to hire.
- Find out if there are any complaints registered against that agency with the Attorney General’s office of your state.
- You can even ask on online forums and blogs about that agency and see what the readers have got to say. You might get a proper feedback, words of caution and much more for your query.
- To find out the credibility of that credit agency, seek information from the Better Business Bureau operating in your city.
- Know your rights and laws of credit so that you will save yourself from being fooled by the credit repair frauds.
If you are a do-it-yourself person, then, the best thing to do would be to start repairing your credit on your own rather than running after a dubious credit clinic. To perform a credit repair you need your credit report first. Then, you should get the necessary changes made in the credit report with the assistance of a Credit Bureau. Devise a credit management plan to steer out of debts and show good payment record on your credit report. May you be blessed with a fixed credit report!
Laws of Credit Repair
- Rubric of Credit Repair: Don’t be fooled by the flashy ads promising to mend your credit report in however murky state it might be in! These ads might sound promising and might even ignite a flicker of hope in your sullen spirits. Hold it there! People with fallen credit aspire to come out of that morass as soon as possible. They even become so desperate that they might want to resort to trial n error mode without actually thinking of the consequences. Remember, such foolish decisions will only aggravate the matter instead of solving it. Think with a cool head; try to resort to legal means, however bleak the other end of the tunnel might appear to be.
- Assert your Civil Rights: First, know your rights. Unless, you know and realize, to what all things you are entitled to as per the law, no body can help you. Don’t expect people to come knocking on your door and enlighten you about your civil rights. Some rights that can help you in the process of credit repair are as follows:
- You are entitled to a free credit report from any or all of the 3 credit bureaus - Experian, Equifax and TransUnion in special circumstances like unemployment, refusal for loan etc. You should seek your credit report within 60 days of such event. Exercise your right, by applying to these credit bureaus for a free credit report.
- As a rule, the credit bureau should also assign a person to decode the credit report for you. If you are not acquainted with the credit jargon or don’t know how to read a credit report, this will surely help you out.
- As a consumer, you can dispute the errors or misrepresentation of information in your credit report by reporting it to the credit bureau. But, neither you nor your credit reporting agency can mess with the facts of your credit report. In fact, any misrepresentation, manipulating the data or changing the identity falsely in the consumer’s credit report is deemed illegal.
- Once a particular entry indicating a mistake has been made in your credit report, it can only be removed by the credit bureau alone and no other external agency can play a role in it. Even a credit bureau can remove such an entry only after the completion of 7 yrs period. In case of a bankruptcy, the entry will be valid for 10yrs.
- You have a right to cancel the agreement with a credit repair agency before the completion of 3 business days.
- Embrace Law: Make an effort to know the right words of law and the correct interpretations of these words. Often, a law reaches a common man in a ripped-off, distorted, connived and circuitous manner in which the true meaning gets lost in translation. No wonder, not many people can pretend to be knowledgeable about law.
According to Law, a Credit Repair Organization is not supposed to charge a consumer before actually completing the task of Credit Repair. That means you need not pay your credit repair agency before they have actually revived your collapsed credit. Besides, they should also supply you a document containing your rights & obligations before you accept the agreement of a Credit Repair Agency. Repairing your credit is an arduous, time-consuming task. Take your time and give it your best shot before chasing the mirage of credit repair agency.
Facts & Fallacies
The world of credit repair is abounding with numerous facts and fallacies that might create chaos in the already flustered minds of consumers. A person in need of credit repair experiences various kinds of emotions like mental trauma, confusion and lack of proper guidance which make him / her restless and desperate for a ray of light that will lead them to the end of the tunnel.
Though much has been said and written about credit repair in the past, there are not many authentic sources that can offer proper guidance to the needy. Some credit bureaus pass the buck by saying that there is nothing they can do to remove the negative information from the credit report whereas some other fraud agencies promise to perform miracles like deleting records and boosting up the credit score. Consumers don’t know whom to trust and what path to take and are in dire need of professional help.
Let’s separate wheat from the chaff by distinguishing between the Facts & Fallacies of Credit Repair:
Fallacy: Once an entry has been made in the credit report you cannot delete it.
Fact: Consumers have the right to dispute any information in the credit report with the Credit Bureau when they think that it is false or inappropriate. Then, Credit Bureau should investigate the dispute within 30 days and should give you the feedback related to it. If the consumer happens to provide any extra details during this period then the Credit Bureau is entitled to take 15 more days to complete its investigation. In case, if the Credit Bureau has committed a mistake they should rectify the same or should send you a reply proving their point and stating the fact that you were wrong.
Fallacy: Time is the best healer of Credit problems.
Fact: Unfortunately, the above statement holds good only in the matters of physical wounds afflicted on a body and not to the Credit Repair. You can always take hold of your finances and perform the Credit Repair on your own. You can also take the help of Fair Credit Reporting Act if you want to dispute any item that is falsely entered in your credit report.
Fallacy: Credit Repair is predictable and can be a sure success overnight.
Fact: No credit agency can promise you that they can repair your credit over night and bring back your fallen credit onto the track. Even if any credit repair agency makes such atrocious claims, be wary of them as they are fraudsters attempting to fool you.
Fallacy: Poor credit score will affect your credit report for ever.
Fact: Credit reports are not permanent as they keep changing every year and the poor credit score is just a temporary phase in your credit history. Once there is an improvement in your credit score, automatically, that change will be reflected in your credit report and will increase your credit worthiness.
Fallacy: Lenders alone will check your credit history.
Fact: Gone are the days where only lenders used to verify the credit reports of the customers. Now a days, even insurance companies and banks are checking the credit reports of their customers to find out how financially viable they are, whether they should be given any coverage or not. Many employers are making it a point to verify the credit reports of the job seekers before recruiting them.
Fallacy: Credit reports delivered by the three Credit Bureaus should be the same.
Fact: All the three Credit Bureaus - Experian, Equifax and TransUnion deliver credit reports of the individuals based on their own calculations. Most of the time, credit scores given out by these Credit Bureaus differ greatly from each other as they follow their own method of calculation.
Fallacy: Race or nationality will affect the credit scoring negatively.
Fact: This is a misconception which most of the marginalized groups secretly harbor in their minds ignorant of the law. According to Equal Credit Opportunity Act, every individual is entitled to obtain credit irrespective of his race, gender and nationality. Law forbids showing discrimination in credit matters in any form and only information like person’s name, loans etc are being considered while calculating the credit score of an individual and not the gender or race.
Use your discretion before following the credit repair tips given by credit repair agencies. Find out what the law actually says before listening to anybody else. Happy Credit Repairing!!
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