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What is Credit Repair?

A credit score is a number, lenders (banks, financial institutions) use to help them decide how likely they will be repaid on time if they give a person a loan or credit card. There are many factors which impact the credit score of you. These factors include total amount of credit taken, types of account, age of the accounts and number of regular and late payments. Speaking simply, bad credit score can really take toll on individuals’ lifestyle. It can hamper his prospect of attaining car, apartments or any loans. Fortunately, you can repair your credit score either by yourself or by hiring advisors who will show you the way how it’s done. It takes good effort from yourself to repair the credit score.
Before you get excited about getting credit repair done completely, it is important to know that credit details remain on your credit score details for 7-10 years. Most of credit repair advisories are scamsters as per FCRA body. The FCRA law provides the way on how it can be done and what details can be refined to improve the credit score. To improve the credit score legitimately, it takes serious effort by strictly sticking to debt repayment plan as per terms and conditions of the credit you have taken. As told above, two ways to credit repair are discussed below:

  1. Hiring Credit Repair Agencies: Taking the advice of credit
    repair agencies is completely legal. These agencies will ask
    you give them credit score report from major credit report
    agencies such as Equifax and Transunion. They will
    scrutinize these credit reports for deficiencies and file
    for dispute if there is any. Dispute is filed with credit
    bureau with supporting documents to remove the dispute from
    the credit score.
  2. DIY credit repair: This is where we discuss how an
    individual can repair his credit score by himself.
    Practicing good financial plan and repaying debt is only way
    you can repair the credit by yourself. You can repair the
    credit by filling the dispute in certain matters by yourself
    as will be discussed later on. Here are few credit repair
    tips:

    1. Keeping credit balances as low as possible
    2. Paying the utility and other bills on time
    3. Servicing the loan as per terms and conditions of
      the loan
    4. Keeping older accounts open if possible
    5. Resisting to apply for new credit cards.

Fair Credit Reporting Act (FCRA) allows the consumers to dispute on the following matters and increase the credit score if possible:

  • Inaccurate personal details in the report
  • Identity theft
  • Fraud
  • Mixed credit records
  • Items that affect credit score negatively past the statute
    of limitations
  • Account Inaccuracies

FCRA provides time limit of 30 days to the bureau to investigate the matters of dispute after receiving it. If you provide the supporting documents along with dispute, the period can be extended to 45 days. The dispute information is removed if the bureau fails to entertain the dispute within the prescribed period.

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