How accurate is credit repair?

But it doesn't work for all types of items and it's definitely not an instant and magical credit score booster. Legitimate credit repair companies can ensure that inaccurate information is removed from your credit reports so that it doesn't hurt your credit rating. However, they can't do anything for you that you can't do for you if you're willing to put in time and effort. How Credit Repair Companies Work The most common way that credit repair companies work is to dispute all the negative elements that appear on your report, whether accurate or not.

Because the credit bureau has 30 days to investigate, this random dispute method may produce positive results temporarily. During the consultation, the items in question will not be included in the credit rating and a notice will appear under each disputed item. If the creditor does not respond with proof that the item is correct, the credit bureau shall withdraw it. Credit reporting agencies are required by federal law to respond to each item in dispute within 30 days.

And if they don't respond, the disputed information should be removed from the credit report. Credit repair companies file many disputes and wait for credit bureaus to miss a deadline. The best credit repair companies can often identify and correct inaccuracies and factual errors in your credit file. But no matter how many disputes a company files on your behalf, it is unlikely that credit bureaus will delete information that their lenders report accurately.

This is where the credit repair service asks you for an Employer Identification Number (EIN) from the Internal Revenue Service, which has the same number of digits as a Social Security number. Many of these companies offer legitimate credit repair services, but unfortunately, many more are essentially a scam. The first is that if the information that the credit repair service is disputing is correct, they will report it again the next time they send data to the agencies. Commercial credit bureaus often send you warning notifications when a derogatory mark is about to be added to your credit report.

It is worth noting that even the most reputable and reliable credit repair services cannot legally do anything that you cannot do yourself. The goal of these companies is to build their credit by disputing outdated or incorrect information in their credit reports, tracking results and monitoring to ensure that errors do not reappear. The Credit Repair Organizations Act requires companies to provide you with a firm total of costs and an estimate of how long it will take to get results. With a positive title like “credit repair”, it's no wonder people fall prey to fraudulent practices by credit repair companies.

As with personal credit, you can pay a credit repair company to clean up your business credit, or you can do it yourself. If the information is accurate, there is little that anyone, even a professional credit repair company, can do little to change it. Typically, these companies offer to review your credit reports and address any negative elements they can with credit bureaus on your behalf. Keep in mind that there is nothing a credit repair company can do for you that you can't do on your own.

If your credit report shows a history of debt problems or contains errors, you may consider using a repair service to “clean up” it. Dun and Bradstreet, Equifax and Experian are the top three credit bureaus that maintain reports on your company's credit. By law, you are entitled to a free credit report every 12 months from each of the three major national credit bureaus: Equifax, Experian and TransUnion. .

Gwen Dasilva
Gwen Dasilva

Entrepreneur. Proud coffee advocate. Wannabe music fanatic. Certified twitter enthusiast. Coffee geek.