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Frequently Asked Questions
What is credit repair?
Credit repair is the act of repairing or correcting a poor credit score, removing inaccurate, obsolete, or unverifiable information. You can hire a company, or you can do it yourself. Most credit reports have inaccuracies. Real credit repair also encompasses building positive credit also.
What does a credit repair agent do?
Our Credit Specialist’s will prepare the appropriate letters and documentation to send to the credit bureaus, original creditors, and debt collection agencies. These letters will be specific to your credit information, and not a blanket dispute letters that may be ignored by the credit bureaus or debt collection agencies. Another form of credit repair is to deal with fundamental issues, such as budgeting, paying down credit cards, and by addressing legitimate concerns on the part of lenders by repayment programs through Debt Consolidation.
How is credit score calculated?
Credit scoring models generally look at how late your payments were, how much was owed, and how recently and how often you missed a payment. Your credit history will also detail how many of your credit accounts have been delinquent in relation to all of your accounts on file. Your credit score reflects how likely you are to pay a loan back. There are five specific factors that go into how your score is calculated. Credit bureaus use information from all 5 of these categories to build your credit score.
Let’s break them down:
- Payment History: This reflects whether or not you make payments on time. Payment history makes up 35% of your credit score
- Credit Utilization: This covers how much of your available credit you’ve used. If possible, stick to 30% or less of your total available credit. Credit utilization accounts for 30% of your credit score
- Credit Age: Credit age shows how long you have had credit based on the age of your accounts. Try not to close older accounts unless they’re full of negative information. Credit Age makes up 15% of your credit score
- Credit Mix: This covers the types of revolving and fixed-payment credit accounts you hold. Lenders like a diverse credit mix. Credit Mix accounts for 10% of your credit score
- Credit Inquiries: This illustrates how many times you’ve applied for new credit in the last few months or years. Inquires list for 2 years. New credit applications make up 10% of your credit score
5 Things That May Hurt Your Credit Scores
- Making a late payment.
- Having a high debt to credit utilization ratio.
- Applying for a lot of credit at once.
- Closing a credit card account.
- Stopping your credit-related activities for an extended period.
Is Credit Repair Legal?
Once you’ve taken the time to explore your legal rights, you’ll see that not only is credit repair legal, but it’s an essential way to take back control of your finances. By ensuring that only accurate and timely information remains on your credit report, you give yourself the best chance to qualify for the credit terms you deserve. Don’t wait to get started with credit repair. The sooner you begin, the better your credit scores will be in both the short term and the long term.
By law, a credit repair company must provide you with a contract that outlines the services it will perform on your behalf.
The contract should include:
- Payment amount required
- A detailed description of the services being receiving
- Deadline to complete the services
- A statement that you can cancel the contract within three business days, or at anytime throughout the process
How does credit repair work?
Credit repair works by requesting removal of inaccurate negative information on your credit reports. In general, credit repair does not remove accurate negative items on your reports. Some things a credit repair process can uncover and get corrected include:
- Accounts that don’t actually belong to you.
- Duplicate accounts, such as debts that are sold multiple times on your credit file.
- Payments reported as late that weren’t actually late.
- Incorrect balances that can lead to incorrect credit utilization amounts.
- Inaccurate accounts that may be the result of identity theft.
- Incorrect inquiries, including hard inquiries you didn’t approve.
- Inaccurate data or personal information, like misspellings of names or aliases’ or old addresses.
- Missing accounts that could be positive items on your credit report.
- Accounts that are actually open when they’re recorded as “closed” and vice versa.
- Incorrect public information like foreclosures and bankruptcies.
Then we will review your credit reports for derogatory marks such as:
- Charge-offs
- Tax liens
- Bankruptcies
After we review we will set a plan for disputing errors and negotiating with creditors to remove those items.
That plan may include:
- Requests to validate information
- Letters to dispute erroneous negative marks
- Cease-and-desist letters to debt collectors on your behalf
Your Credit Support Specialist may also recommend applying for new accounts to add positive information to your reports.
