The information in your credit report helps determine your credit score. Your credit score and report are then reviewed by lenders when evaluating you for credit. Negative information or a low score can either prevent you from obtaining credit you desire or an cause you to pay a higher interest rate. Repairing issues in your credit report can improve your credit score and credit report.
What Does Credit Repair Involve?
Credit repair is a loose term used to describe fixing or correcting any issue within your credit report. Credit reports contain a large amount of information and often have mistakes. Credit reports show all accounts with late payments, charged off accounts and collection accounts. The more items you are able to resolve, the better your credit report and score will be. Credit repair is limited. You cannot just call and request negative accounts be removed. You must follow certain steps and procedures to be successful.
Credit Repair Services
Credit repair services operate on a fee-based schedule. According to the Federal Trade Commission, credit repair services cannot charge you for services in advance. A credit repair service does a great deal of work for you. The company will review your credit reports and send off dispute letters to the credit bureaus for you. Some companies offer a service to contact creditors to reach settlements for you. Exactly what is offered depends on the company. Credit repair services cannot and do not do anything you can't do for yourself; however, this does not mean there isn't a value to the services. For someone who does not have the time or desire to research laws and proceed accurately, a credit repair service can be of use.
Can I Do It Myself?
Credit repair services do not have secret tools to perform tasks you can't perform yourself. A credit repair service has experience and doesn't have to figure out how to do a certain task, but if you have time and the desire, you can do the credit repair yourself. You should proceed with caution if you are unable or unwilling to take the time to read and learn about credit repair. It is possible to make your credit situation worse if you do not know what you are doing. For example, you may have a positive account reporting an incorrect balance. If you contact the credit bureau to correct the balance, and the creditor fails to respond to the investigation within 30 days, the entire trade line is deleted and will not come back on your report. This means your credit report has now lost a positive account. This can damage your credit score severely depending on the circumstances.
Cautions
Read and learn about credit repair before you attempt to do anything. Some important things to keep in mind while beginning your credit repair include how to deal with debt settlement offers and negotiations and that paying a charged off debt will not help your credit score. Learn how to dispute accounts on your credit report and which accounts to dispute -- never dispute a positive account unless the account is a result of identity theft. Find the statute of limitation on debt in your state, and be careful disputing any account that is within the statute of limitation. Disputing the account while within the statute of limitations may bring attention to your case and result in the creditor begin to pursue legal action to recover the debt.
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