A credit fixing company charges you a fee to review your reports and dispute errors on your behalf. The goal is to remove inaccurate information that can hurt your credit score or cause problems when applying for loans or insurance policies. While there are legitimate credit repair companies, others should be avoided like the plague.
The CFPB warns consumers that for-profit credit repair companies should never charge upfront fees. Those that do are often scams. They may also claim they can "fix" your credit for a monthly fee, which is illegal under the Credit Repair Organizations Act (CROA). You can avoid this by choosing a credit repair company that offers a free consultation and doesn't require payment upfront.
While a credit repair company can dispute errors on your report, they cannot remove accurate information or guarantee that all negative items will be removed from your credit history. Those types of promises should raise red flags. In addition, a reputable credit repair company should have a clear refund policy in case you are not happy with their services.
There are several steps you can take to improve your credit and have inaccurate items disputed, even without a credit repair agency. Many credit bureaus and lenders offer credit monitoring for a fee that is usually much less than what a credit repair agency charges. Keeping track of your credit score and working directly with creditors is also an effective way to improve your credit.
A legitimate credit repair company will work with the three major credit reporting agencies, Experian, Equifax and TransUnion, as well as any financial companies that have reported to the credit bureaus. These might include credit card companies, banks or debt collectors. Credit repair agencies will typically send letters to the credit bureaus and information furnishers asking that incorrect, outdated or incomplete information be corrected.
You can also contact the credit bureaus directly to file a dispute for free, as long as you have proof of an error. The credit reporting agencies have 30 days to investigate and delete the disputed item from your report, according to the Fair Credit Reporting Act. It can be a time-consuming process and there is no guarantee that the credit bureaus will agree with your request.
Inaccurate collection accounts are another type of item that credit repair agencies can help you with, but not all credit repair companies are able to do so. A reputable credit repair agency will be able to identify when a collection account is not in your name, does not reflect the correct balance or has a false date of last activity. A shoddy credit repair service will simply file lots of disputes and hope the credit bureaus miss a deadline or otherwise make an error that results in an inaccurate negative item being removed from your report.
When shopping for a credit fixing company, be sure to look for an initial, up-front fee that's used for set-up or first work and an ongoing monthly payment. You should also check for any consumer reviews and the company's adherence to CROA guidelines.
Prime Credit Advisors is a reliable credit repair company in Illinois that offers all the significant credit repair services including good faith letters, fixing mistakes on your report and using loopholes to contest items on your report.
It also communicates directly with creditors and the credit bureaus to make sure changes have been made.
The experts here improve bad credit through credit help and also monitor the progress of your credit repair.
