Home General How Do Credit Repair Companies Work to Fix Credit Reporting Errors?

How Do Credit Repair Companies Work to Fix Credit Reporting Errors?

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Being free of debt is a wonderful experience, but it’s a preserve of a few individuals. For the rest, taking out loans to cover daily expenses is inevitable. 

Loans can be short or long term based on what you plan to do with the funds. You need a good credit profile to qualify for a long-term loan. Lenders usually look through your credit report to determine your creditworthiness. 

But your report can have errors that affect your credit score. You can choose to fix these errors yourself (not recommended) or seek the services of a credit repair company.

Here are some things you need to know about credit repairs are and how they fix credit report errors. You can also checkout Lexington Law Firm Review that deals and give solution with these kind of issues.

What  exactly is credit repair?

Credit repair involves contesting mistakes on your credit report to enhance your credit score. The aim is to remove negative accounts from your report, thereby increasing your chances of getting approved for loans.

You have better chances of securing an auto loan or a mortgage when you have a good credit rating. You’ll also get these loans at lower interest. 

How do credit repair firms fix credit report errors? 

Having a bad credit rating impacts your life in various ways. It can get in the way of you qualifying for loans or getting jobs. Fortunately, platforms such as Viva Loans UK can connect you with lenders who give payday loans for bad credit.

But if you want to take out long-term loans, you might want to get in touch with a credit repair firm first for them to fix errors on your report that might be affecting your credit score. Here are some of the ways credit repair companies fix credit report errors. 

  • Comprehensive and thorough assessment. Credit repair companies extract data from all the credit bureaus in the country. They then assess this data to identify any discrepancies or errors.  If they come across any errors, they instigate the error removal process. The errors can come from duplicate accounts, expired negative accounts, and mistakes with payment history.
  • Get rid of dated information. Specialists from these firms read through your credit report and identify out-of-date information. There are limits on how long negative accounts can stay in your report. Negative accounts will adversely impact your credit score if they remain longer than they ought to. There are plenty of instances where credit bureaus – the bodies charged with maintaining credit reports – may fail to notice these errors. As an inexperienced individual, you may also fail to identify such errors quickly. Therefore, credit repair firms can do this for you and ask credit bureaus to rectify any errors they identify.
  • Getting rid of dubious credit items. Credit repair firms review your credit report once you hand it to them to ascertain that each entry is valid. These firms can help you delete derogatory marks like tax aliens, bankruptcies and charge-offs. They do this by contacting your creditors and negotiating with them on your behalf. Derogatory marks have a negative impact on your credit score and can stay on your report for 7–10 years. It’s crucial to remove these marks from your report if you want to stand a better chance of accessing affordable credit. 
  • Get you out of illegal collections. Sometimes lenders can resort to unlawful methods of debt collection. A credit repair firm can help you get out of such a situation. Some loans come with hefty interest rates that trap you in a debt cycle. A credit repair firm can instigate a dispute that’ll prompt the bureau to investigate the creditor. If the creditor uses unlawful debt collection methods, the bureau will stop it, and the information won’t be included in your report. This will help improve your credit rating and, consequently, it’ll improve your chances of getting loan approval.
  • Correct missed payments. There are situations where you’ve had to repay a debt slowly and in small amounts for one reason or another. In such instances, accountants may overlook such payments hence fail to include them in your report. You may also lack time to go through each payment entry to see if all payments have been included. This is where a credit repair company comes in: they’ll go through the entries to identify the mistakes and contact the creditor if there are any discrepancies. In doing so, your credit rating will improve.
  • Communicating with lenders. You can opt to look through your credit report to identify any errors yourself rather than seek the services of a credit repair firm. However, there are several drawbacks to this approach. For starters, it’ll take time, and secondly, you may fail to notice some mistakes since you’re inexperienced. Another drawback is that your attempts to get credit bureaus and creditors to remove these errors might be unsuccessful.  A credit repair company acts as a go-between between you and lenders. Since they already have a pre-existing relationship with these institutions, it’ll be easier for them to get the errors removed.

How can you verify that a credit repair company is credible?

There are various ways to determine whether a credit repair firm is legitimate. You can:

  • Read through the company’s reviews.
  • Search for the company on FCA’s complaint database.

But there’s also intuition and common sense, where if the deal is too good or seems fishy, think twice. Avoid companies that claim the following:

  • They can create a new identity for you legally.
  • They can eliminate negative accounts from your credit report.
  • Assure credit improvement.
  • A firm that asks for payment before they provide the services.

Final thoughts

If you have errors on your credit report that you’d like fixed, get in touch with reputable credit repair firms. These companies know how to deal with credit bureaus and can have them remove all negative accounts from your report. If you are considering seeking the services of credit repair companies, ensure you do thorough research beforehand.

David Tobin did his degree in psychology at the University of Hertfordshire. He is interested in mental health, wellness, and lifestyle.

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