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How To Fix Your Credit

How to fix your credit, what is everything involved?  We get into the details.

Do credit restoration companies work?

Applying for a car loan, credit card, or mortgage is challenging if you have bad credit. Additionally, if you are a business owner and applying for credit for your business, it can be especially tricky. Working very hard to improve your credit and not to have it reflected in your credit score can be incredibly frustrating. Credit restoration companies assist clients by reviewing their credit reports and correcting or removing incorrect items to improve credit scores.

You most likely have many questions about credit restoration companies and how they work. In this document, we break down the most common questions to quickly understand what a credit restoration company does and how they can improve your credit. You can start from the very beginning or jump to a particular question.

How do credit resolution companies work?

What's a credit restoration company?

A credit restoration company helps clients comprehend and restore their credit by analyzing credit reports and contesting inaccuracies with creditors and credit bureaus. They have the knowledge and experience to address credit issues that could be difficult to resolve. Their expertise makes the credit restoration process easier for customers. Credit Restoration companies know what to look for, understand the process needed to address inaccuracies, and understand what clients are entitled to request from both creditors and credit bureaus.

You have probably heard of credit counseling organizations asking yourself if they are the same as a credit restoration company. Credit counseling organizations are not the same as credit restoration companies. They are generally nonprofit organizations providing advice about debt and financial management, getting copies of credit reports, and other services, depending upon the organization.

How do credit restoration companies work?

Like a credit counseling organization, a credit restoration company will typically request and review your credit report from major credit bureaus (Experian, Equifax, and TransUnion). However, that is where the similarity ends. Credit restoration companies will create and execute a plan to fix any discrepancies and recommend ways to improve your credit score.

Every company's methods and processes vary, but we'll describe what to expect from most companies, generally speaking.

Review Your Credit Reports

When reviewing credit reports, credit restoration companies will look for credit reporting errors.

Examples include:

  • Duplicate accounts
  • Accounts that don't belong to you
  • Incorrect inquiries
  • Inaccurate accounts

Inaccuracies can take an unfair toll on your credit score. Occasionally reviewing your credit report helps catch these inaccuracies and inconsistencies before they affect your credit score.

Credit restoration companies are often experts and know what to look for, saving you the effort and time needed to review each report item by item.

Dispute Discrepancies

Credit restoration companies initiate credit challenges for the errors found on your credit reports. By submitting a dispute, you are requesting the credit bureau review the accuracy of the information contained within your credit report. Credit bureaus are required to either correct or remove the discrepancy if they are unable to verify it.

Credit restoration companies can save you time, ensuring you're doing things correctly by identifying and gathering the necessary evidence. They also help you manage the communication process with creditors and credit bureaus.

Provide Recommendations To Improve Your Credit

This step will vary between credit restoration companies. Some companies will monitor your credit, while others will identify opportunities to improve your credit score.

Other credit restoration companies may not offer credit monitoring, but instead, offer credit counseling to help you craft a plan to manage your credit in the future.

PCI's credit restoration process includes the following steps:

  • Intake
  • Credit score analysis
  • Follow-up and escalation

How much does credit restoration cost?

The cost to restore credit will vary by company and the level of service you select.

The cost to restore credit can range from one-time, flat rates, charges for each inaccuracy found, or monthly payments. The Credit Restoration Organizations Act states that credit restoration companies are not permitted to request or receive payment until the results promised are delivered.

Regardless of how much you pay for credit restoration, you can save in the long run after your credit score has improved. A poor credit score often results in higher interest rates and fewer options when shopping around for things like auto or personal loans.

Spending the time and money to repair your credit with a credit restoration company may save potentially thousands of dollars in the long run, depending on your situation.

What are the benefits of restoring your credit?

Some of the benefits of restoring your credit include:

  • Lower borrowing costs or lower interest rates
  • Qualify for better options
  • Approval for higher borrowing limits
  • More negotiating power

How can I assert a credit restoration company?

You can assert a credit restoration company by reading reviews, asking the right questions, and understanding what they legally can and cannot do. Doing your research ahead of time can save you time, money, and unnecessary stress.

What are some things to look out for?

Some red flags to be aware of include:

  • Payment up-front – As was mentioned previously, this is illegal, and you should not pay.
  • Too good to be true – Promising to get rid of negative items, even if they are correct, is a red flag that the credit restoration company is not legitimate. Additionally, beware if the company claims that they can increase your credit score by an exact amount, especially within a given amount of time.
  • Hold back or provides misinformation – The credit restoration company should inform you of your rights as a customer, such as your right to cancel your contract with them within three business days.
  • Asks you to misrepresent information – A legitimate credit restoration company will not ask you to misreport or misrepresent yourself.
  • Can't answer questions – If the company avoids answering a question about the price or service, it may be a sign that the company is not legitimate.

Here are the characteristics of a legitimate credit restoration company, so you know what to look for when researching assistance for your situation.

How long does it take to restore credit?

As with anything, it takes time to see results from the credit restoration process. Additionally, results vary based upon your current score, financial situation, and many other factors.

For example, a person with a few simple items on their credit report may see their results sooner than someone who has several complicated issues. However, results often vary greatly.

Credit bureaus are required to correct or remove any inaccuracies reported within 30 days under the Fair Credit Reporting Act. However, it may still take longer, depending upon your circumstances.

Can I restore my credit?

You can restore your credit. However, you must make sure you have done your research to do it correctly. Legitimate credit restore companies should inform you of that when you contact them. You can do anything that a credit restore company does, such as contacting creditors and credit bureaus directly.

You should be advised that restoring your credit without the help of a knowledgeable credit expert can hurt you if you have not done your homework. You can easily overlook many things if you don't have the knowledge or experience that they provide.

For example, if you dispute one of the credit bureaus, they may get denied for not providing sufficient information to prove your case. This can very easily happen even though you are correct.

Can a credit restoration company help me?

Credit restoring companies can't guarantee results. However, you can ask for testimonials and look for reviews to determine past success. Credit restoration varies for everyone. One of the best ways to see if it's the right solution for your situation is to start with a consultation. This way, you can ask all of the questions needed to get an idea of the services and pricing that works best for your unique situation.

If you are ready to get started, sign up for a free consultation and how we can help get started towards cleaning up your credit report.