How Does Credit Repair Work?

Disclosure: This website contains affiliate links.

How Does Credit Repair Work?

You may be suffering from bad credit, but you may not be entirely to blame.

Have you ever found yourself checking your credit report, only to be shocked by the score that you see? If you know you’ve been paying your bills on time and have no history of bad financial habits, chances are there may be an error on your credit report.

How Do I Know When There’s Been A Mistake?

There’s a few things to look out for on your credit report:

  • Spelling Errors
  • Mathematical Errors
  • Information that isn’t yours
  • Information that may have surpassed the statute of limitations

Mistakes happen, and sometimes a creditor may have made an error that’s negatively affecting you. In this case, your first step would be to reach out to them and see if they can fix the mistake themselves.

Oftentimes however, you may have been a victim of identity theft without knowing it. Because of this, your credit information could have easily been compromised, leaving you in a bad situation. While you can consult with the lender yourself, if the situation is too complicated, it might be best to contact a credit repair company.

What To Know Before Hiring A Credit Repair Company

You may be eager to start improving your credit score, but before you do, take some time to be honest with yourself. Is your bad credit rightfully deserved? If that’s the case, there isn’t much a credit repair company can do to help you out.

A credit repair company’s job isn’t to magically fix your bad credit score. In fact, they focus on fixing items on your credit report that may be incorrect. If the information show is indeed correct however, they can’t do anything about it.

Your Credit Report Has Mistakes On It, Now What?

Now that you’ve determined that the information on your credit report isn’t correct, you can start working on fixing it. You can first dispute the false information to the credit bureau, who then has anywhere between 30 to 45 days to get back to you.

From there, you want to make sure you’ve provided the bureau or lender with all the necessary documents they may need to help you. If you’ve hired a credit repair company, you’ll need to provide them with similar information. Before you hand over any personal documents however, be sure that the company you’ve hired is legitimate.

Beware Of Scammers When Giving Out Your Credit Information

Prior to submitting any personal documents, make sure the company you’ve hired is trustworthy. There are a few ways for you to tell the difference between a legit credit repair company from a fake one.

  • Legit credit repair companies are not allowed to require payment upfront
  • Make sure you’re getting a contract signed by both parties
  • Credit repair companies are required to disclose your consumer rights
  • Hiding information from you should be a red flag

Repairing your credit shouldn’t be stressful. It might seem overwhelming, but with the proper help and information, you’ll be on your way to rebuilding your credit in no time.