When to Pay for Credit Repair Services

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When to Pay for Credit Repair Services

Do you have poor credit and want to rebuild it? Have you thought about using a credit repair service? Do you know what a credit repair service is and does? This guide from Primary Residential Mortgage will explain credit repair services, what they do, and when to use them. If you have questions, call a loan representative at Primary Residential Mortgage. We are always happy to help.

What is Credit Repair?

Credit repair removes negative information that shouldn’t be on your credit reports so it will stop dragging down your credit scores and make it easier for you to get credit in the future. Still, it won’t remove negative information that is accurate, timely, and verifiable. You can hire a credit repair service for around $100 a month to handle certain tasks on your behalf to help you rebuild and repair your credit, but everything a service does, you can also do on your own if you have the time and energy to invest.

How Credit Repair May Help Your Credit Scores

A Federal Trade Commission study found about 5% of consumers had errors on their credit reports that could significantly lower their credit scores because credit scores are calculated from data in those reports. Lower credit scores could mean that you are denied needed credit or must pay higher interest rates to get it. That’s why it’s essential to check and tidy up your credit reports regularly. You are protected from unfair practices and inaccurate information by the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. Those laws mandated that your credit reports should not contain inaccurate entries; outdated information; or multiple entries for the same debt, which happens sometimes when debts are sold to collection agencies.

Common Errors on Your Credit Report

Everything on your credit report must be accurate, and the burden of proof is on the credit reporting agency. In other words, if they can’t prove it, they must remove it. Common errors on credit reports often include:

  • Debts that should have aged off the report
  • Accounts that do not belong to you
  • Bankruptcy or other legal actions that were not yours
  • Misspellings, which may mix in negative entries that belong to someone with a similar name, or might keep positive entries from showing up when they should
  • Incorrect dates
  • Debts that can’t be validated and verified

When to Use a Credit Reporting Service

Legitimate credit repair services companies check your reports for information that shouldn’t be there and dispute it on your behalf. You pay a monthly fee, and the process could take several months to a year. You usually have to pay a setup fee as well. Some of these companies say that it is worth it because you might save more than the cost of their services in terms of lower interest rates that you might qualify for with higher credit scores.

How to Choose Reputable Credit Repair

A credit repair company does not have any rights that you don’t in disputing information on your credit reports. The FTC warns against credit repair agencies that guarantee that they can remove accurate negative information. Just as laws protect you from unfair reporting and collections, there are laws to protect you from credit repair companies that mislead prospective customers. The Credit Repair Organizations Act requires companies to give you a three-day right to cancel without charge, a fixed total on costs, and an estimate of how long it will take to get results. A reputable company should also coach you on how to handle your existing credit accounts to avoid further damage.

If you have questions about how to repair your credit, Primary Residential Mortgage is here for you. Contact us today and let us know how we can help.

 

Note: Opinions expressed are solely my own and do not express the views of my employer