Can a Credit Repair Company Remove Debt?
The short answer is “No.” Credit repair companies generally do not remove debt. If you owe money, you will, more than likely, still owe that money even after you go through credit repair.
So why would you want to go through with credit repair?
Good question. Reputable credit repair companies help remove derogatory items from your credit report. Doing so will typically increase your credit score and that has value in the form of buying power. A better credit score commands better interest rates and other major benefits like being approved for a mortgage . So even though credit repair companies can’t technically “remove” debt, they CAN give you the financial boost you need to accomplish life-changing goals.
Most credit repair companies offer to fix your credit for a fee but don’t teach you how to improve and manage your finances. There are a few exceptions, but most of these companies work by sending generic dispute letters to credit bureaus, which you can do yourself with some time and effort and save your money.
Also, the credit repair industry is full of scams, so it’s crucial to do thorough research before agreeing to work with such organizations.
So, how exactly does a credit repair company help you with your financial situation?
Understanding Credit Repair
Credit scores are based on several factors. For example – Are your bills are paid on time? Missing payments can damage credit scores and make it harder for people to get other credit in the future. Low credit can make it more difficult to rent an apartment or get a job.
Credit scores are based on the information in a person’s credit report, and sometimes that information is wrong. That happens when creditors report inaccurate information to the credit bureau or in case of identity theft.
Credit repair is the process of attempting to fix those issues. If the information is correct, there’s not much anyone can do to change it, and in most cases, it will stay on the credit report for seven years and then vanish.
However, if the information on a credit report is incorrect, users can dispute it by themselves or by paying someone else for help. In many cases, there isn’t much a credit repair company can do for you that you can’t do yourself. However, utilizing an investigative research team or an attorney can make the whole process much faster and more efficient.
How Credit Repair Companies Work
Legitimate credit repair companies check your credit reports for information that isn’t supposed to be there and dispute it for you. Many of these companies also make sure it doesn’t appear again.
However, that isn’t always the case. Some companies will succeed in repairing your credit, but only for a few months, after which the information reappears because it was correct. That’s why it’s essential to do your research before hiring anyone. Below is a list of mistakes that can be fixed.
● Accounts that aren’t yours● Debts that can’t be verified● Inaccurate profile information (wrong address, incorrect spelling, etc.)● Negative records that are too old
How to Check a Credit Repair Company?
The best way to verify a credit repair company is to read the reviews. Doing this will let you see users’ experiences and not just what the company wants you to see on their website. Also, avoid companies that seem too good to be true, because in most cases they are. If the company claims it can do the following, it’s a major red flag and most likely a scam:
● Remove accurate information from your credit report● Create a new legal credit identity for you● Guarantee a specific score● Guarantee a specific time frame
It is a good idea to choose a company with an investigative research team and partnered attorneys that offers counseling and coaching services too so that you learn how to improve your financial situation long-term.
How Much Does Credit Repair Cost?
A typical company charges anywhere from 50 – 150 dollars per month. Whatever the case, fees can quickly turn to thousands of dollars, as these processes can take months or years with many traditional credit repair companies.
How Long Does Credit Repair Take?
With most companies, the disputing process can be dragged on for several months or even years. Each time an item is disputed, the credit bureaus typically have 30 to 45 days after getting your dispute to investigate and verify the information. Generally, the credit bureau will contact the company that gave the information and ask it to examine.
It’s preferable to work with a company that addresses all the derogatory items on your report at once. Otherwise, you may get caught in a loop of endless disputes and a very slow road to credit recovery.
Even more importantly, approaching credit restoration with a team of investigative researchers is advantageous because creditors often respond with a variety of stall tactics that delay the process. Knowing how to respond to those stall tactics is critical.
What to Keep in Mind
The Credit Repair Organizations Act (CROA) makes it illegal for credit repair companies to lie about their results and services. Credit repair companies have several requirements under CROA, such as:
● Providing you with a written contract that explains services they’ll give and your legal rights● Enabling you to cancel within three days without charge● Achieving the agreed service before charging you or receiving fees
If a company fails in mentioned requirements, it’s a sign something isn’t right.
Where to Reach Out
Having poor credit history doesn’t necessarily mean you can’t get credit. Not all creditors look at the credit history the same way. Some may give you credit if your credit history has improved recently. So, you can try to contact the creditors to find out their standards. Most of them rely on your credit scores.
If you want the smoothest way of achieving your credit goals, contact us. White, Jacobs & Associates is an attorney-backed credit repair company with an investigative research team committed to improving your life through credit. We offer a free consultation where we determine whether you’re a fit candidate for our program.
If you are, you’ll work with a credit expert from the beginning till the end. He\she will coach you about credit while the IR team and in-house attorney work to customize letters and complete four rounds of audits to enable your long-term financial success. Reach out today.