Here’s what you need to know about credit repair
One of the most important steps in getting your finances in order is getting out of debt. Credit card debt makes up the majority of most people’s financial obligations and can affect your ability to get credit when making major purchases.
So, it’s worth fixing your credit history, among other steps, by paying off your credit card debt. You can seek help from a credit repair company, but this is not always the best course of action.
Here’s what you need to know about credit repair companies, if they’re worth contacting, and how you can fix your credit reports on your own.
What Are Credit Repair Companies?
A credit repair business is an institution that helps you understand your credit by analyzing your credit report and repairing it by disputing any inaccuracies with your creditors and credit bureaus.
Are Credit Repair Companies Worth It?
If it is a legitimate business like Lexington’s LawIt may be worth it to hire a credit repair company. Its professionals may be better equipped to deal with credit problems than you. They are familiar with the provisions of federal consumer laws and have experience helping many customers challenge their credit history.
Either way, the companies that offer credit repair services have gained a bad reputation over the years. The reason is that many crooks have infiltrated this service and are using the platform to prey on unsuspecting customers who want to fix their credit scores quickly.
The business is so prone to fraud because it is easy to start a credit repair business. Anyone, absolutely anyone, can do it. Although federal laws regulate the activities of companies once they are operational, the laws are silent on the requirements of individuals or companies wishing to do business.
Since the Internet made it easier to start online businesses, many people have started credit repair businesses. They don’t have to take any training or license to get started. They’re probably watching a few videos on the internet, learning a few tips, and starting to advertise their business.
So, to answer the question of whether credit repair companies are worth it, we strongly advise against them unless they are proven companies like Lexington Law.
You could do the credit repair yourself
On the other hand, companies like Lexington Law don’t do anything that you can’t do on your own for free. In other words, you can do credit repair yourself. It only has four easy steps.
Step 1: Get your free credit reports from AnnualCreditReport.com to find out what information they contain.
2nd step: Check if there are any errors or incorrect information on the report. If you find even the slightest mistake, it is worth disputing. The error could be in your name, spelling, address, social security number, and credit history.
Check the credit cards listed, your major purchases, and the amount of debt as well. If there is an error, print the report, highlight the error, and gather the documentation you need to dispute the information.
Step 3: Write your letter to the credit reporting agency (TransUnion, Experian, or Equifax) and point out the error. Explain it in detail and attach copies (not originals) of the report and your documentation.
The credit reporting agency must respond within 30 days. They must correct any proven errors and notify you in writing of the changes made. The company also sends notifications of these corrections to affected parties who received your report within the past six months.
Step 4: With your credit errors fixed, it’s time to work on your credit status. Decide to start paying off your debt, pay your bills on time, and avoid more credit problems. Live within your means and work to achieve your preferred scores.
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