While it’s certainly possible to fix credit on your own, many are turning to credit repair companies for help. This may because they don’t have time to do it themselves, or they simply don’t know where to begin.
And there’s nothing wrong with hiring a service to fix your credit—but going to the wrong one can definitely be a problem.
Are all credit repair companies the same?
Most credit repair companies, unfortunately, operate in a very similar fashion. They rely solely on dispute letters to make improvements to their clients’ credit reports, and this is a generally ineffective way to address most credit problems:
• Dispute letters can only resolve certain credit report problems
• Dispute letters cannot effectively resolve verifiable debts
• Dispute letters often achieve temporary results
• Disputing the wrong item(s) can get you sued
If you’re serious about settling your credit problems once and for all, it’s important that you understand the risks associated with the average repair company. In general, credit repair companies that rely on dispute letters to fix credit are often ineffective and can even be dangerous.
How a credit repair company can make your problems worse
With most companies—especially the bigger ones—large numbers of clients are lumped into a standardized dispute process. Regardless of their specific needs (or problems that require individual attention), each client is handled exactly the same: the negative information on their credit reports is disputed with the credit bureaus.
At this point, the process is already becoming risky. It just isn’t realistic to try and dispute away a lifetime’s worth of bad credit—and it usually doesn’t work. When legitimate debts and other negative items are verified with the credit bureau:
• The items will not be removed
• Your creditors/collectors may be alerted
• You may begin to (again) receive collection notices
• In many cases, you can be summoned to court
If a creditor or collection agency wins a judgment against you, they can garnish your wages or even place liens on your property, and the judgment will damage your credit & remain on your report for up to 10 years or more.
It’s clear why disputing alone cannot entirely resolve most common credit issues, and any company that tries is definitely worth avoiding. There are better, more sensible and more effective ways of handling bad credit.
Dispute letters are only a part of credit repair
Dispute letters are a great way to have credit report information removed that is:
• Inaccurate
• Outdated
• Misleading
• Questionable
• Unverifiable
This means that because of your right to have an accurate credit report, you can challenge any items you think are hurting your credit unfairly, or without valid cause. If the disputed items can’t be verified within a reasonable amount of time, they must be removed.
Just remember that accurate items that are within the statute of limitations probably shouldn’t be challenged, and this is something a dangerous company will overlook every time.
What you can do about verifiable debts and other negative items
If disputing can only take you so far with credit repair, you’ll have to employ other tactics to finish the job. In the most typical cases, unpaid debt is at least partially responsible for credit report damage, and the only way to turn it around is to pay it off.
Debt settlement
While it may seem impossible to get out debt, debt settlement (or debt settlement) makes it achievable—and easy. In fact, it’s possible to have your debts reduced by as much as 60% with proper negotiation.
Convincing collection agencies to settle your debt for just pennies on the dollar is a service not offered by most credit repair companies, but it’s essential if you really want to get to the source of your credit problems.
Having your debts paid in full is a great way to make a new impression on lenders, and in some cases, we can even negotiate a complete removal of the collection items altogether, or send good faith letters to have items such as late-pays removed from your report.
Establishing new credit
Your level of active credit makes up about 30% of your overall credit score. If you’re lacking in this department, establishing new credit lines can offer a big boost. In fact, it’s likely that you’ll notice an increase of up to 50 points in just weeks after establishing new credit.
Again, most credit repair companies don’t offer assistance with new credit, so it’s important to find one that does.
My Credit Group can help with all of these issues—whether it’s credit report problems, unpaid debt or a lack of positive credit, we can help apply the most effective solutions to your individual needs. We don’t waste with mass-mailing dispute letters because we know there’s a better way.
If you want the most out of your effort, let us help you solve your credit problems once and for all. We’ll address your bad credit with the personal touch you need to get the best possible results.
