Credit Repair: What is Credit Repair and how it works?

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What is Credit Repair & How credit repair works?

If you’re like most people, there’s a good chance you’ll find mistakes or problem

items on your credit report. If you just have a couple of straightforward

mistakes, it may be relatively easy to get them cleared up.

If your problem is more complicated, or you don’t have proof of your side of the story, it can take a

lot longer. Some consumers have found it harder to deal with credit reporting

agencies than with the IRS.

fix credit fast in Sickness and in Death

Carmen and Sean had excellent credit. That is until their lives were turned

completely upside down.

Sean was a supervisor at the local branch of a nationally known auto parts

store. Carmen was a stay-at-home mom who raised three great children, all of

whom had gone to college and were now off on their own.

They were empty nesters and enjoying their time together. Then one day

Carmen felt a lump in her breast. She was a little surprised but didn’t act on it,

thinking it may just be her imagination. Three weeks later she knew she wasn’t

imagining anything. Carmen’s doctor confirmed it was breast cancer. An

immediate mastectomy was required. They quickly obtained a second opinion

from an alternative medicine clinic and just as quickly decided to stick with a

traditional medicine solution. Before the couple knew what hit them they were

dealing with surgery, radiation therapy, follow-up visits, and very large medical

expenses.

It was at this point that Sean learned that the auto parts store had ceased

providing dependent insurance coverage. Sean was shocked. Why hadn’t he

been notified?

The human resources assistant at the company’s national headquarters said a

notice had been sent out. Employees had the choice of having the cost of

dependant coverage deducted from their paycheck or not. Many employees

throughout the company had decided to find their own coverage for spouses and children.

With over 40% of the employees deciding against paycheck

withdrawals for dependent insurance coverage Sean’s lack of a response wasn’t

unusual.

Sean was undone. He now had $40,000 in medical bills he thought were

covered. He didn’t know where to turn.

The hospital collection representative was calling Sean constantly. Carmen

needed another $10,000 in treatments to battle cancer into remission. The

hospital needed to get the $50,000 paid now or they couldn’t continue her life-saving treatments.

Sean felt very pressured. The hospital was very aggressive in

their collection efforts he confided to a few friends. His friends agreed but could

offer no solutions to the problem. Sean was desperate. He knew he couldn’t tell

Carmen about the insurance coverage problem. She was recovering slowly but

was fragile. Bad news could block her progress.

Sean did what he had to do. He started scraping together as much money

as possible the best he could. He liquidated the meager IRA account in a down

stock market. After paying the penalties for early withdrawal of the money he

had $4,000. The house had appreciated somewhat so he took out the maximum

home equity line of credit he could in the amount of $20,000.

Sean still needed $26,000. The hospital collection representative was not

really that pleased that he had provided them with almost half the money. Sean

asked if there would be any more charges. The representative said he didn’t think

Sean asked if they would accept payments. But the payments they offered

were far too high, and when Sean balked, the representative laughed and said

they weren’t a bank. He did suggest, however, that Sean look into a credit card

that other people in his situation had used. It was a high-interest, high-fee card

but it could provide him with $20,000 in credit right away.

Sean took down the name and number of the credit card company. Since the

hospital collection representative was giving out advice Sean asked how he

could come up with the remaining $6,000. The representative suggested that

Sean avoids fully paying some regular bills for a while. Car payments and house

payments could all be deferred for a time. A medical emergency was always a

good excuse.

Sean knew that he had to get the money together somehow. Carmen’s life

depended on it.

The hospital recommended credit card be obtained and provided another

$20,000 towards the medical bills. For the remaining $6,000 he would have to

completely drain his savings and then stop paying some regular bills and apply savings to pay off the hospital.

Finally, in another two months, the hospital was satisfied.

Sean’s other creditors were not.

The mortgage company, the auto leasing company, and all his other creditors

were now demanding full payment. Sean explained his predicament and how the

hospital demanded money up front to finish treating his wife and how the

hospital said the other creditors would understand.

The other creditors did not understand and were angered. Medical expense

emergencies were not an excuse to stop paying their bills. They demanded

payment.

Sean had nowhere to turn. The high-interest credit card payment and the

home equity line of credit payments were both hitting him hard. He was unable

to make full payment on either of them, much less his other monthly payments.

He had paid the hospital to save Carmen’s life and was now losing the battle for

a secure financial future.

Unable to pay creditors his credit report scores plummeted. The report

showed numerous late payments, closed accounts for failure to pay, and accounts

sent to collection.

Sean’s only solace was that Carmen was recovering. The price was steep, but

it was worth it.

As Carmen grew stronger Sean explained their situation. She of course

understood, and, as with her medical condition, she vowed to recover financially.

Carmen and Sean began to live frugally, but such a lifestyle did not

compensate for the larger debts they had. Their house, burdened by both a

mortgage and a home equity line of credit payment, was in the process of

foreclosure. Sean had learned of a strategy whereby an investor and/or renter

could clear up and take over the house payments and share in the equity when

the house sold. The advantage to Sean and Carmen was that by using such a

strategy their credit report would not show a foreclosure. The disadvantage to a

potential partner was that with the mortgage and the line of credit there was not a

great deal of equity in the house.

But Sean vowed to overcome his condition and was persistent. He found a

family who had been in financial straits several years earlier. They would not be

able to obtain a home loan for several more years, but they could afford the

mortgage and the equity line payments. Sean worked out a deal whereby they

moved into the house and took over the payments. Sean and Carmen agreed to

stay on the title until the new couple could qualify for a loan. At that point, Sean and Carmen would deed the house over, allowing their obligations to be paid and

allowing the new couple any benefits of appreciation on the property.

Sean and Carmen moved into much smaller quarters, a one-bedroom

the apartment they could afford. It wasn’t what they were used to, but the kids were

gone, and the house cleaning chores were much reduced. Nevertheless, they

vowed it was only a temporary move. They would be back in their own house in

time.

Their Buick LaCrosse had been repossessed. That fact was a major

detrimental item on his credit report. Of the 12 negative reports, the repossession

of a car really stood out. Sean was a car guy and found a used car in great shape

at a low price for getting around. That wasn’t the problem. The problem was that

if he didn’t get the repossession off his report he’d never get a home loan again.

Sean decided to go right to the source. He called the credit department of the

leasing company and started calmly negotiating. He questioned the amount

received for the car at auction. He questioned all of the fees charged, from

attorney’s fees to repossession fees. (How could one repo man operating in the

middle of the night ever hope to collect $175 an hour? If that was the rate, were

they hiring?)

In a calm, reasoned, and likable manner he worked as the credit

representative day after day. He was never angry or belligerent. He was just the

opposite. He developed a rapport with the representative, who started enjoying

working with a kind voice on the other end of the phone for a change.

With all the extreme and various fees, a total of $10,000 was supposedly

owed to the car leasing company. Sean was willing to pay 20% of that if they

would remove the negative information from his credit report. The credit

representative had to state that 20¢ on the dollar was something that they

couldn’t do. Sean was undeterred and kept talking. He explained the situation

with his wife and the hospital, not as an excuse or for sympathy but as a matter

of conversation. The credit representative was incredulous. For a hospital to

withhold medical services until complete payment was made, and to represent

that medical expense emergencies were a legitimate excuse to avoid the payment

of other debts was offensive. She said he would call Sean right back.

A moment later Sean had a settlement offer of 30¢ on the dollar. He

accepted, relieved that a major negative was off his report.

Sean now had 11 negative statements on his credit report. He had learned

that if he could get rid of at least half of them he could hope to once again

qualify for a home loan. So he set about knocking them off. The first negative report he went after was a department store payment he

had missed. It was a small amount, only $189, but in the turmoil of scraping

together $50,000 for the hospital, the payment had been missed and now was on

his report. With interest and penalties, the change had ballooned to $375. Sean

spoke to the credit representative, explained his situation, and asked what they

could do. The credit representative started out high but Sean got him down to the

amount of $189, with an advance written promise to remove the ding from his

report. Sean had learned that many collectors will say they’ll remove the item,

but once paid never do. He learned it helps to have that promise in writing so

you can force the issue later.

The next item to resolve was a fuel company credit card. He had only fallen

behind by $215, but the account had been sent to collections. He called the

collection agency representative to discuss the account, which with all the

charges was now $289. The representative was rude, belligerent, and caustic.

Sean had to laugh saying that he sounded like a cliché. The representative grew

even nastier, which Sean calmly realized would happen no matter what was

said. The representative was on commission and he would bully his way into

payment however possible.

Sean discussed settling the account. The representative demanded full

payment. Sean asked for a 30% discount and a written promise to remove the

negative filing from his credit report. The representative laughed bitterly and

said they didn’t provide any such promise until the account was paid. Sean said

that was unacceptable and asked to speak to the representative’s supervisor. The

representative shouted an obscenity and slammed down the phone.

Sean immediately called the fuel company to report the conversation. The

fuel company’s representative said that once the account was sent to collection it

was out of their control. Sean knew that wasn’t true and asked to speak to a

supervisor. After waiting on hold for half of his lunch break Sean finally spoke

to the supervisor. He explained that he was trying to pay off the account but that

it did him no good unless he could have it all removed from his credit report. He

explained that the collection company’s representative used obscenities, in

violation of federal law.

Sean was calm and reasonable, which the supervisor appreciated. The

account was pulled back from the collection company, a firm that the

supervisor admitted was a source of problems. The fuel company promised to

remove the negative credit filing upon a 70% payment. Sean paid the bill and

another account was cleared. Of the nine remaining negative filings, four didn’t really register with Sean.

While things were hectic and blurred as he was trying to scrape together enough

money for Carmen’s treatment, he thought for sure he would remember all of the

missed payments. But these four creditors, a stereo store, a medical clinic, a

medical publisher, and an equipment leasing company, were a mystery. Sean and

Carmen had looked into alternative medical treatments but they had never

committed to anything. Or so they thought.

Sean sent a letter to Experian, TransUnion, and Equifax (much like the one

found in the Resources section) disputing the four items he felt did not belong in

his credit file. He knew that the credit reporting services and the creditors in

question had 30 days to respond or the negative filing had to be removed.

As it turned out, only the finance company responded. After the information

was confirmed as correct, Sean contacted the creditor directly and was reminded

he had opened an instant credit account to buy a portable CD player for Carmen

but didn’t recall receiving a bill, and forgot about it. He discovered the address

they had on file for him was wrong. Sean took care of the payment and closed

the account. Given the mix-up and Sean’s circumstances, the company agreed to

remove the account from his credit reports.

The three medical-related creditors never responded to the credit reporting

agencies’ requests for confirmation. This did not surprise Sean. The alternative

medicine clinic they had visited had tried to pressure them into a series of

expensive and dubious treatments. Sean and Carmen were immediately turned

off and committed to nothing. Because those three creditors failed to respond to

the credit bureaus’ request within 30 days the three negative (and possibly

fraudulent) reports came off.

Sean now had five negatives on his report. Two were for credit cards he had

been previously late on but were now current. The new tenant (and future

owner) of his house was paying one of them regularly as part of the house deal.

Sean was paying his personal credit card on a regular basis. In time the late

notices would become less important as he demonstrated a pattern of consistent

timely payments.

The remaining three negatives were not to be cured. One was to the hospital

for MRI charges of $7,000, another was to a radiologist to read the MRI for

$5,000 and the third was for lab work of $3,000 incurred during Carmen’s

follow-up visits. Sean vowed this $15,000 would never be paid. He had learned

that the hospital should have never pressured him the way they did. They should

have informed him that he had the right to go to another hospital for treatment instead of demanding every last nickel he had.

For these three negatives, Sean decided to use a consumer statement. Under

the Fair Credit Reporting Act, every American has the right to add a statement of

up to 100 words to their credit report. It can be used to clarify or explain any

items and appears on all subsequent reports requested by grantors of credit. Sean

submitted the following consumer statement: “Our family suffered large,

uninsured, and unexpected medical expenses in 2012. Prior to that time, we had

always paid our creditors promptly. Since that time we have recovered and now

pay all of our creditors promptly.” While he knew his statements would not help

his credit scores, he knew that if a lender reviewed his credit reports personally,

they would see the statement. He hoped it would come in handy if he needed to

hunt for a new job or get a mortgage.

Sean’s good work at clearing his credit report and explaining his situation

paid off. Within two years he qualified for a home loan. He and Carmen

purchased a two-bedroom townhouse in a nice neighborhood populated with

couples their age. They enjoyed their new house and appreciated everything

about their new life.

How to File a Consumer Report Dispute – credit repair & fix credit fast

Picture the customer service department of a major credit reporting agency. It’s

large and it’s busy. (It may even be based in India instead of the U.S.) It gets

thousands of calls and letters each week. Some are legitimate disputes and some

are generated with help from credit repair agencies, but it’s sometimes hard to

know which are which. Some letters from consumers are clear and easy to

understand, while some are indecipherable, rambling, and pages long.

Each complaint is handled by a customer service rep with one job: To keep

the work moving. He or she will enter the dispute in the computer with a

summary code of why the consumer is disputing the information. At the press of

a button, that will be fired off to the creditor to be verified. The whole process of

entering the dispute usually takes about one minute, and from there it’s handled

mainly by a computer.

What does this mean for you? First of all, it means you shouldn’t expect that

someone is going to read the entire five-page long letter you’ve written about

why the information in your report should be changed. It also means that you

have to make sure your complaint will work for you and not against you. How

do you do that?

As we have discussed, the law that governs credit bureaus is called theFederal Fair Credit Reporting Act. It gives you the right to dispute information

on your credit report that is inaccurate or incomplete, and requires the lender or

credit bureau receiving your dispute to investigate.

If you want to ask the credit bureau to investigate something that appears to

be wrong on your credit report, you have the choice of either writing to or

calling the credit bureau.

Calling can be faster – if you can get through to someone who can help you.

If you call, make sure you take good notes about what was discussed, when, and

with whom. And before you call, make sure you can summarize your dispute

clearly and in one or two sentences, just as you would if you were writing the

bureau.

Examples:

I never held this account.

This account was not late as listed.

This account was discharged in my bankruptcy and should list a zero

balance.

Written correspondence takes a little longer but leaves a paper trail, which is

one of the best ways to protect your rights. (Keep copies.) You’ll also avoid

getting dragged into a conversation where something you say is misinterpreted.

Many credit repair experts advise you to write, rather than call, but for a

straightforward mistake or two, you may just want to pick up the phone.

Gerri Detweiler advises you to write your letter by hand IF your handwriting

is neat and legible. (Computer-generated disputes can look like they came from a

credit repair company, which credit reporting agencies don’t like at all.) Date

everything. Include your name, address, social security number, and credit

report number if you have one.

Keep it simple. State exactly what’s wrong, and what should be listed. Make

sure that information stands out in your letter. (See our sample dispute letters for

examples.) There’s no need to use legal jargon or cite specific sections of the

law. After all, the credit reporting agencies are very familiar with the FCRA.

If you have proof of your side of the story, include it. Never send originals,

only copies. And only send documents that are really relevant. Trust me, no one

is going to read your whole stack of paperwork.

Send your letters by certified mail, return the receipt requested, and keep copies in

your file. You should expect a reply within 30 days.

Don’t bother filing a dispute with any of the major credit bureaus if you

haven’t recently ordered your report from that bureau, or from a company that

supplies that bureau’s report. For example, if you get your report from TransUnion and discover mistakes, you’ll need to order your report from

Equifax and Experian before you try to file disputes with them. They may not

have the same information, and you’ll need their correct contact information to

make sure your dispute is handled promptly.

I can’t emphasize enough how important it is to keep track of all your

dealings with the credit bureaus. Create a file and note every phone call, and

keep copies of all correspondence you send and receive.

The credit reporting agency usually has 30 days to investigate your dispute.

If you provide information to back up your side of the story, they must share that

with the furnisher (lender, court, or collection agency, for example) that supplied

that information.

The furnisher then must review the item and respond to the credit reporting

agency, either by noting the item is correct as it’s reported or by making a

correction. If the furnisher determines that the item is wrong, it must send a

correction to all bureaus that have been given the wrong item.

If the item in question is incomplete, the CRA must update it. For example, if

your report shows a charge-off but does not show that you paid it off, that

the information must be corrected upon your request.

When the credit reporting agency has completed its reinvestigation, it must

supply you with a written response (either that the information is confirmed as

correct, or that a change has been made) and must give you a free copy of your

credit report reflecting any changes made. If no changes are made, you won’t be

given your report.

Important: If a correction is made, the CRA is not supposed to report the

deleted item again unless the furnisher first verifies that the item is accurate and

complete, and the CRA notifies you in writing before it reinserts it for a second

time. This notice should include the name, address, and phone number of the

furnisher. Also note that you can ask the CRA to send a corrected report to

anyone who received your incorrect report in the last two years for employment

purposes, or in the last six months for any other reason. If you already were

denied credit, insurance, or employment based on mistakes in your report it may

not help but it probably won’t hurt.

Finally, be nice. Think about what it must be like to work at the credit bureau

and handle calls and letters from upset consumers day in and day out. If you’re

on the phone and can’t get anywhere with the person you are speaking with, ask

for a supervisor. When you’re writing your letter, at least be nice, even if you

must be firm. Don’t give up!

Getting Answers – credit repair specialist

If you get your credit report and don’t understand something about it, the FCRA

gives you the right to contact the credit reporting agency to ask questions. It also

requires each of the major CRAs to establish a toll-free telephone number, at

which people who can answer questions are available during normal business

hours. You’re supposed to get this toll-free number with any credit report you

order from the agencies. But that doesn’t always work the way it should.

In fact, the major credit reporting agencies have had to pay fines totaling

more than $2.5 million as part of settlements negotiated by the Federal Trade

Commission because they did not maintain toll-free telephone numbers with

personnel who were accessible to consumers during normal business hours.

According to the FTC’s complaints, Equifax, TransUnion, and Experian

blocked millions of calls from consumers who wanted to discuss the contents

and possible errors in their credit reports and kept some of those consumers on

hold for unreasonably long periods of time. If you have trouble reaching

someone to discuss your credit report, it’s a good idea to file a complaint with

the FTC at the ftc.gov website. You can also file a complaint with the Consumer

Financial Protection Bureau, which will be taking over the most enforcement of

the Fair Debt Collection Practices Act. Visit ConsumerFinance.gov.

Credit Reporting Agency or Creditor? – credit repair loans and credit repair process

Most people assume that if something is wrong with their credit report, they

should notify the credit reporting agencies to make a correction. But that’s not

necessarily the case.

When the federal Fair Credit Reporting Act was first written in the 1970s no

mention was made of the lenders (called “furnishers” in the Act) who reported

information to credit bureaus. Back then trying to get them to correct mistakes

could be like pulling teeth – if you could get them to respond at all.

But in 2003, Congress amended the Fair Credit Reporting Act with the Fair

and Accurate Credit Transactions Act of 2003. FACTA included more detailed

requirements for companies that report information. It gives consumers the right

to dispute mistakes directly with the lenders reporting them.

Here’s how it works:

You have the right to dispute information directly with a furnisher (lender).

If you dispute information you think is wrong directly with the furnisher, it must

notify the CRAs that the information is under dispute.

Put your dispute in writing and include any documentation you have to back

up your side of the story. (If you can get someone on the phone who can help

you, that’s fine, but often all you’ll have is a PO Box for an address.) The

furnisher then has 30 days to get back to you with the results of its investigation.

The furnisher doesn’t have to investigate if it determines your dispute is

frivolous or irrelevant, or if it’s substantially the same as the one you’ve already

submitted directly to the credit bureau. It also does not have to investigate if

your dispute is initiated by a credit repair company. It does have to tell you why

it won’t investigate, however, and can’t simply choose not to respond.

There are several advantages of filing a dispute directly with the furnisher:

It probably doesn’t get as many disputes as the credit reporting agencies,

and may have information in its files that back up your contention that it’s

wrong.

If it makes a correction, it will have to notify all the bureaus that have the

mistake.

It’s supposed to be careful not to report the same information again.

At the same time, the furnisher may not be as efficient as the credit reporting

agency in handling disputes. If it’s a collection agency, in particular, it may do a

lousy job of investigating disputes. For some reason, collection agencies seem to

assume that everyone who disputes a debt is just trying to wiggle out of it.

In the case of bankruptcy, a tax lien, or a judgment, the furnisher will be a

court and you’ll have to find out which court has the information. This can be

excruciatingly difficult but stick with it. If the information is wrong, it shouldn’t

be reported any more than any other wrong information. (The CRA should give

you the name and contact information for the court reporting the information.)

The Big Problem – fix credit fast

Here’s what’s likely to be the biggest problem with disputing information

directly with the furnisher under the new law. The updated FCRA specifically

says just the fact that a consumer says the information is wrong is not enough to

give the furnisher reasonable cause to believe it’s inaccurate. The fact of the

matter is, however, that consumers often find damaging information on their credit

reports that they can’t prove is wrong – they just know it is.

Example: Maria Rodriquez has a collection account from a major retailer on

her credit report. She never opened an account with that store. She believes it

probably belongs to someone else by the same name.

But how can she prove it’s not hers? So far, she’s spent hours trying to

unsuccessfully get the credit bureaus and creditors to remove it.

Dispute wrong information first with the credit reporting agencies. If that

doesn’t resolve it, dispute the item directly with the company reporting it.

Read More for more information: Debt Consolidation: Best Debt Consolidation Loans For Bad

Disputing Correct Information – credit restoration company

There’s no magic wand to clean your credit report if it’s shot, but there are

several things you can do if your credit report is correct but lousy. Here are your

options:

Just Wait: As the information gets older, it becomes less important. As I

explained in the last Post, eventually it will all fall off your report. In

addition, as information gets older, it carries less weight when your credit scores

are calculated. Other things being equal, information in the past 24 months is the

most important as far as your scores are concerned.

Rebuild Anyway: Take the first strategy of waiting for a step further and start

adding new positive references. This is important: It’s not enough to get negative

information off your report. You must have positive references to build new,

good credit! Someone with no credit history (or a skimpy one) will have a low

credit score, just like someone with a negative one.

If you have only one or two (or no) open available credit cards or loans, add

some new references. See the section Building Credit later in this post.

Dispute It: Again, you can always try disputing negative information with

the credit bureaus. If it can’t be verified, it must be removed. This can be

effective in the case of old debts where the furnisher may no longer have easy

access to its records. Watch out, though, they may add it on again if it’s later

verified. (The CRAs are supposed to warn you first in writing before they put

disputed and deleted information back on your reports, but it doesn’t often

happen.)

Ask for Forgiveness: One way to get accurate but negative information off

your report is to ask the creditor to “re-age” the account. By “re-aging” the

account the creditor agrees to remove the late payment(s).

This works best when the account has been paid on time for a good stretch

but there were a few late payments with good explanations (illness, move,

perhaps divorce). Don’t bother to ask a creditor to re-age an account with lots of late payments over a long period of time unless you have a really good reason

for it.

According to guidelines by the Federal Financial Institutions Examinations

Council, creditors should not re-age accounts more than once a year, or twice in

five years. The account should be at least nine months old, the borrower should

show they are willing and able to pay, and they should make at least three

payments in a row on time.

Your challenge will be finding someone who will actually help you at the

lender’s office, and then convincing them to do so. I recommend you be very

patient and kind – after all, you are asking for a favor. But also be persistent. If

one person can’t help you, ask for a supervisor. If necessary, call back again.

Remember what they say about the squeaky wheel.

Get Help: If you have multiple negative items, you may be tempted to try a

credit repair company. Sometimes this can be a helpful route to go but be

careful. Before you choose one, see our warnings later in this post.

Because an accurate credit report is so important, I want to review the rules

here for disputes:

Make your letter brief.
Handwrite your letter when possible. (But only if your writing is clear and

legible.)

Keep records of all phone calls, if applicable.
Keep copies of all correspondence.
Send your letters by certified mail or with delivery confirmation.
Dispute inaccuracies with lenders first, then the credit reporting agencies.
Be pleasant but persistent.

Getting Nowhere

What happens if you have a legitimate dispute and can’t get anywhere with your

dispute?

Example: Shana bought a car from a car dealer in what turned out to be a

scam. As the investigation heated up, she stopped paying the loan on advice

from the state attorney general’s office, which even provided a letter stating that

the information should not appear on her credit file. But her repeated calls and

letters to the credit bureau got her nowhere.

Here are a few options:

Complain to Regulators – best credit repair companies

You can file a complaint with the FTC at

ftc.gov and the Consumer Financial Protection Bureau at

consumerfinance.gov. The FTC is supposed to forward your complaint to

the credit reporting agencies involved and ask for a response.

Hire an attorney – top credit repair companies

Some attorneys specialize in suing creditors and credit

reporting agencies. You can find one by going to NACA.net. If the

the attorney doesn’t recommend a lawsuit, ask whether you can hire him or

her to write a few letters for you.

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Add a statement to your file – best credit repair companies

You’re allowed a 100-word statement that

describes your side of the story. While useful, note that the credit scores

don’t take those statements into account, and it’s often your score that

matters.

Building Credit – A credit restoration company

I’ve told you how important it is to build good credit. But if you have no credit

or damaged credit, it’s tough to get started. Here are a couple of strategies that

work well:

Get a secured credit card:

A major credit card can be your best friend

when it comes to your credit report – if you pay it on time. You can get a

secured Visa or MasterCard by putting up a security deposit, usually $200

– $500 to start, with a company that offers the secured card. Use it just like

any other major credit card and you’ll build your credit. Just make sure it’s

reported to all three major credit bureaus or it won’t be very useful. See

the Resources section for more information.

Read More for more information: How CREDIT System Works in Banking | Finance?

Borrow someone else

e’s good credit to fix credit fast

If you live with a relative with a sterling credit history, they may be able to help you out here. Ask them not

to cosign, but to add you to their major credit card as an authorized

user. You don’t even have to touch the card they’ll send. In fact, it’s better

you don’t or you may be tempted to run up bills you can’t pay.

If the issuer will report your authorized user status to the credit reporting

agencies (and most will) it will appear along with the entire account history for

that card. So suddenly, you can have a 10-year history of a major card paid on

time. Just don’t abuse the privilege. Don’t use the card, and after you’ve built

your credit history ask the person who helped you out to remove you. A

warning: If they should pay late, your credit will be hurt.Note: During the housing boom, credit repair firms exploited the authorized

user trick and brokered authorized user slots on credit cards among totally

unrelated users. Someone would “buy” their way into a better credit history in

order to qualify for a mortgage. As a result, FICO changed its system to give

this authorized user accounts less weight. However, using this strategy among

family members residing at the same address may still be valuable, and as long

as the new user doesn’t run up debt on the card, or pay it late, it can’t hurt.

Once you have these accounts under your belt for four to six months, then go

ahead and get a retail credit card. After another four to six months, go ahead and

add another credit reference. In another four to six months, add a third reference

such as another major credit card or an auto loan. Your goal is to have four or

five positive references always paid on time – and as little bad debt as possible!

You may not rebuild overnight, but you can see significant improvement in

your score in as little as six – eighteen months if you stick with it.

Read More for more information: Great Credit: What is the Meaning of Great Credit ?

Best Credit Repair Companies – Top credit repair companies

You may have seen ads promising that you can get a brand new credit file,

regardless of your past credit history. Or you may have seen warnings from

consumer protection agencies that say that credit repair is a scam. The truth

probably lies somewhere in between.

Credit repair agencies do generate lots of complaints to the Federal Trade

Commission and other agencies that protect consumers. For example, when the

FTC was more active, they filed 31 cases against credit repair firms as part of

“Operation Eraser” – a federal-state crackdown on fraudulent credit repair

companies. And a few years later, the FTC put over 180 Web sites on notice that

their credit repair claims may violate state and federal laws.

Why do people fall victim to credit repair? The biggest reason is they are

desperate to borrow again. Their credit has already been ruined and now they are

looking for another way to borrow. Throwing your money away on credit repair

so you can just get more bad debt is a lousy investment.

But another reason people want to repair their credit is that they’ve made

mistakes and now they want to start building wealth. Access to credit at decent

rates for good debt can help. That’s a good reason to want to rebuild your credit,

but it’s not a reason to waste money on phony credit repair schemes.

Let’s look at the truth about credit repair.

Read More for more information: Great Credit: What is the Meaning of Great Credit ?

*Myth #1:We can show you how to get a brand new credit rating***

These ads are typically touting one of several scams. One is to steal the identities

of people who have died, sometimes in places like Puerto Rico or Guam, and use

them to get credit. Authorities in Georgia, for example, uncovered a fraud ring

that sold identities of deceased people for $500 – $600 apiece. The fraudsters

scanned obituaries and then ordered background checks – including social

security numbers and credit reports of the people who had died – over the

Internet. Eighty people were suspected to be involved in the crime, in which they

then used these recently deceased people as “cosigners” on auto loans.

Another variation is to offer to teach people to build a brand new credit

identity. This scam is called “file segregation.” One technique they teach is to get

an Employer Identification Number, or EIN, which is similar in digits to a social

security number. The idea then is to try to set up a whole new credit file under

the EIN.

Here’s what the FTC says about file segregation: “It is a federal crime to

make any false statements on a loan or credit application. The credit repair

company may advise you to do just that. It is a federal crime to misrepresent

your Social Security number. It also is a federal crime to obtain an EIN from the

IRS under false pretenses. Further, you could be charged with mail or wire fraud

if you use the mail or the telephone to apply for credit and provide false

information. Worse yet, file segregation likely would constitute civil fraud under

many state laws.”

But here’s the real reason to just say no. It can be very difficult to effectively

start a credit history – even with a new social security number or employer

identification number. By the time you’ve gone to that much trouble, you might

as well as have just worked on rebuilding your credit in legitimate ways. Save your

money and do it the right way.

Read More for more information: Good Credit Score: How Much Is a Credit Score Worth?

Myth #2: We Can Get You Credit, Guaranteed

If you’re having trouble getting credit, you may be drawn to companies that

promise they can get you a major credit card or line of credit, guaranteed. The

hitch is that they charge a fee, maybe just $100, or maybe as much as $1000 or

more. Under the Telemarketing Sales Rule, if someone guarantees or suggests

that there is a strong chance they can get or arrange a loan or other form of credit

for you, it’s against the law to ask you to pay – or accept payment – for their service until you get your loan or credit.

Here’s another “guaranteed credit card” rip-off. A credit card advertised

heavily on the Internet promises an “$7500 Unsecured Platinum Credit Line.” In

small print below it, it says “for all kinds of our merchandise.” This is a modern

version of the “catalog cards” that were marketed in the late 1980s and early

The 1990s. You get a card and can use it to purchase merchandise out of that

particular company’s catalog. Now maybe the merchandise is OK and not

overpriced. (You can’t tell because you don’t see the catalog unless you sign up.)

But even so, it costs $149 to sign up and you may have to make a hefty down

payment on the merchandise you do buy. Stay away from these programs.

Read More for more information: Free Credit Report Your Lifelong Report Card

Myth #3: There’s nothing that credit repair firms can do that you can’t do on your own

While most credit repair is a rip-off, there are times when it can be helpful – if

you find a decent credit repair agency to work with (a challenge in itself). If you

have a lot of negative items due to a divorce, bankruptcy, etc., or if you’ve been

battling the credit bureaus or creditors with no success, you may need a company

that has experience in working with those kinds of problems.

Just like you can do your own taxes or hire someone else to prepare them,

there are times when it makes sense to hire a credit repair firm to take on the

the tedious task of correcting your file.

Unfortunately, the FCRA makes it so difficult to sue creditors or credit

bureaus that most attorneys won’t even take them on. There are law firms that

specialize in credit repair, but some have gotten in trouble with the FTC so

choose carefully.

Read More for more information: The Psychology of Debt: What Are The Psychology of Debt

You Have Rights – credit restoration company

Credit repair companies are regulated by federal law, and in many cases, state

laws. Under the Federal Credit Repair Organizations Act, credit repair

companies must give you a copy of the “Consumer Credit File Rights Under

State and Federal Law” disclosure before you sign a contract. They also must

give you a written contract that spells out your rights and obligations. Please

read the contract.

You have specific protections under that law. For example, a credit repair

company cannot:• make false claims about their services;

perform any services until they have your signature on a written contract

and have completed a three-day waiting period. During this time, you can

cancel the contract without paying any fees; or

charge you until they have completed the promised services.

Many credit repair firms get around the upfront money clause by

charging a fee for educational services, then performing the credit repair. Many

will refund fees if they can’t successfully remove items from your file.

Please be careful about spending your money on credit repair. There are so

many rip-offs out there that it’s important you check out any company carefully,

and even then still consider what you can do on your own.

FAQ

In how many days does the CIBIL score increase?
This way we can know that, if you have done any credit transaction today, it takes 45 days to get updated. Now we can say that the CIBIL score is updated after 45 days. Apart from this, if the bank sends its report late, it may take 45 to 60 days for the CIBIL score to be updated.

How to do CIBIL Correct?

Steps to fix CIBIL Score-
Pay the dues on the due date…
Pay your credit card bills on time…
Don’t let the credit rating get bad…
Been checking CIBIL’s credit score throughout the year…
Check your credit report…
Reduce your credit card dues…
fix credit score mistakes

How is civil bad?
If you have taken a loan from a bank and do not repay the installment on time, then it can spoil your CIBIL score.
The easiest example of this is that you took a loan before the lockdown and could not repay it later due to the lockdown. ,
Even if the credit card bill is not deposited on time, the CIBIL score will get spoiled.

What should be the CIBIL score for a credit card?
what is the correct score?

The CIBIL score is calculated between 300 to 900 marks. In this at least your score should be more than 750. If you score less than this, you can get into trouble. A score above 800 is considered good.

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