Good credit can’t be established in a day, but bad credit can be boosted with time and effort. Through the process of credit restoration, you can improve your credit score. Read on to learn how you can do this.
Understanding Credit Restoration
Your credit score determines your chances of getting mortgages, loans, and credit cards with good interest rates. A potential landlord may want to know your credit score before allowing you to lease an apartment. A bad credit score can also affect your chances of being hired for a new job.
Credit restoration involves the following steps:
- Checking your credit report
- Identifying errors
- Sending out credit dispute letters to resolve the errors
Common Credit Report Errors
It’s normal to have errors in your credit report. The Consumer Financial Protection Bureau (CFPB) lists the most usual errors on their website:
- Identity errors such as wrong name or contact details, incorrect accounts due to identity theft, or mixed file.
- Account status was incorrectly reported, such as closed accounts being tagged as open.
- Wrong current balance or credit limit.
- Data management errors such as reinsertion of wrong information after it was already removed or corrected.
Can You Do Credit Restoration by Yourself?
Most people don’t want to pay fees to repair their credit. A non-profit counseling agency can assist you free of charge. If you prefer to DIY, try the steps below to fix the errors at no cost:
- You are entitled to receive a free credit report under the Fair Credit Reporting Act (FCRA). You can request this from AnnualCreditReport.com.
- Check for any discrepancies in your credit history that can affect your credit score.
- List down the legitimate errors you identify from your credit report. This may include balance errors, wrong identification numbers, and incorrect reports of delinquent payments.
- File a dispute with Equifax, TransUnion, and Experian. You can submit the dispute online, phone, or mail.
- Please wait for the credit bureaus to give their feedback. Credit bureaus are given 30 days to finish the dispute process, but it usually doesn’t take that long.
- If your dispute letter isn’t successful, you may need to consult a consumer lawyer. They may resolve the situation right away, but it may also end up in a lawsuit. Unfortunately, a lawsuit will extend the process for two to three years.
Do You Really Need a Credit Restoration Company?
You can hire a professional if you feel uneasy about doing the credit repair process alone. However, you must carefully choose the company you will hire. Fraud and scams frequently happen in the credit repair industry.
Try having an initial consultation with the company to understand how they operate. The Federal Trade Commission (FTC) has a list of signs to look out for a fraudulent company:
- They require an upfront payment before they start working for you.
- They advise you not to contact the major credit bureaus like Experian, Equifax, or TransUnion.
- They advise you to dispute accurate information on your credit report.
- They advise you to put false information on credit applications.
- They don’t bother to inform you of your legal rights under the CROA and FCRA. They focus on telling you what they will do for you. They also don’t answer your questions adequately.
Reading the company’s reviews on the internet is helpful but should not stop there. Check if a potential company has any red flags from the Better Business Bureau website. It also has a scam tracker to help you know about scams in California. A company that complies with the law will surely help you improve your credit history.
Limitations of Credit Restoration
Credit repair still has its limits. It won’t help you remove accurate information that negatively affects your credit score. This includes foreclosure or repossession. You’re not allowed to remove accurate information, but you can request your creditors to do so.
Some of the information in your credit report are from the credit bureau itself. This includes liens, judgments, and bankruptcies. The FCRA allows the credit bureaus to list both Chapters 7 and 13 for ten years. However, the three major bureaus decided to list Chapter 13 bankruptcies for only seven years.
Still Having Trouble With Credit Restoration? We Can Help.
Reviewing your credit reports is essential to improve your credit. It will help catch errors that might be negatively affecting your scores. We understand that this process might be overwhelming, especially for those who don’t have the time to do so.
If you’re not satisfied with your credit status, we can help. Top Priority Financial Solutions is one of the leading credit repair companies in California. We strive to help our clients rebuild their tarnished credit while still complying to federal laws. Book an appointment with us today.
