We’ve all been there before; you get denied on a credit application because you don’t have enough credit history. Or worse, you have too many bad marks on your credit report such as missed payments or written off accounts (which will eventually roll over to a collections agency.)
A common problem I hear about the most happens when a collections agency picks up a charged off account; then they make a new account for it. This could cause a duplicate record on your credit report. Making a single late payment now show up as two, one for the original account you had with the lender and the second for the new account opened at the collections agency.
There should only be one active account reporting late payments!
This is just one example of many of the oversights companies have when reporting information to your credit report.
On top of that.
Most collections agencies will use very questionable tactics for conducting business and collecting debts from consumers.
This is why the Credit Repair industry exists: to combat the shady practices of Collection Agencies, Credit Bureaus, and Lenders.
Charge-offs, late payments, and disputing mistakes are the most common and simplest issues to get repaired. Identity theft will require much more extensive credit repair knowledge and often will require police reports to be filed.
Other common reasons for repairing credit are caused by negative public records that are filed against you. If you plan on fighting any type of negative public record, it’s wise to seek out a lawyer or finance professional in the credit industry for assistance. I do not recommend fighting public records by yourself.
You can learn more about the ethical practices of Credit Repair here: Credit Repair Organizations Act
Key Points to Remember About Credit Repair
- It can be extremely difficult to navigate the complex world of the credit industry all by yourself.
- 70% of all reported errors that are disputed by a credit repair company get removed; With an average time of 45 – 60 days.
- Don’t expect miracle results overnight. It’s a game of sending letters back and forth. You’re not the only one whose sending in a letter to dispute something.
Self-Help Credit Repair Vs. Hiring A Pro
Self-Help credit repair is something you can absolutely do yourself if you want to save money. There are many self-help books and blog articles that can guide you through the process. The issue with a self-help approach is that your average person will make many mistakes during the process. These mistakes will provide the person with ZERO results.
But something worse can happen as well.
The failed attempt will then make a Pro’s job much harder and could even blow the chance for them to successfully help you!
Let’s use the following example to explain how this is possible.
Most people who don’t know any better will use common sense which will lead them to the nearest phone to call a lender, credit bureau, or collections agency. The reason for your call, to directly dispute a late payment on your credit card account. Or some other error on your credit report.
Not only is this a big waste of time while you wait on hold to talk to someone. You’ll likely have to follow-up with paper documents and a written request for a resolution. It’s best to do the written request right from the beginning and skip the phone entirely.
IF YOU RECEIVE A CALL, DON’T ANSWER IT OR INSIST ON FOLLOWING UP IN WRITING ONLY
Unless you know 100% what you are going to say and do for presenting the facts regarding your situation, STAY OFF THE PHONE WITH THESE PEOPLE!
The best self-help credit advice I ever got was this: It’s to easy to get caught up in the moment and say the wrong thing on the phone. If you skip the phone call entirely and just mail in a letter, you have time to think through your reasons and defense, for a successful correction or removal of a negative item on your credit profile.
Think Credit Repair Is Not An Option? Think Again
If you choose not to fight the bad marks on your credit report, the only option is to let them fall off organically. HOWEVER! This can be a frustrating, time-consuming process, that could drag on for up to 7 years.
If any of your defaulted credit accounts get charged off, you also run a big risk of getting sued.
At some point, you’ll want to build up your credit score again and will need to apply for a new credit card or loan for this to happen.
But, getting approved for these new accounts will be almost impossible for a minimum of two years (from the date that your last bad credit mark was reported.) For some, this is too long of a wait, so they consider Credit Repair as an option to help get their good credit back in a shorter amount of time.
I hope you got something out of this article. Credit Repair can be done by yourself or with the help of a reputable credit repair company. Fixing bad credit can be a very emotional and stressful business activity.
The more you learn about how credit works, the better off you can handle any negative credit situation that needs to be dealt with.
Please comment below and share your thoughts!