Credit Repair
How do the credit repair companies fix your credit?
Iv'e heard they send letters but how can I learn aboutit to do this for myself and my friends and family?
Public Comments
- They don't. Never pay ANY amount to ANY company promising to fix your credit. The only way to fix your credit is to pay your bills. There are several ways to tackle the debt, but it is going to take a lot of willpower. First, make a list of your debt, balances, minimum payments and interest rates. See how much is due to go out versus how much income you have monthly. Sometimes taking a second job to help pay off the debt may be necessary if your debts exceed your income. If the majority of your debt is credit cards, call your credit card company and ask if they can reduce your interest rate at all. Even if you are behind and paying at a default rate, explain your situation and see what they can do. Sometimes you may need to speak to a supervisor. It doesn't hurt to ask and you may be pleasantly surprised to know that many companies will reduce it. The key is to make your payments ON TIME. Timely payments and reducing the amount of credit you are using are big determinig factors in how lenders see your credit worthiness. Another Your credit will not be stellar overnight,remember, you didn't rack up the debt overnight. But with determination and sticking to a plan, you will fix it on your own and have a better feeling of relief knowing you did it.
- They send letters to all three of the credit bureaus specifically noting a derogatory item on your credit report that you want to be verified. If the item is not verified within the the time allowed by law the item will be removed from your report. They send letters for every negative (derogatory) item on your report to each bureau that has the item listed. If the item is verified as accurate the service usually sends more letters asking for further verification which the bureaus have to follow up on by law. The reason this works has to do with the law protecting consumers from inaccurate information being put on their reports. The burden of proof is on the creditor to prove all the negative information is accurate or it is removed. Credit repair companies send enough letters and contest enough verifications that they usually are successful in removing negative items from their clients credit reports. You can learn specifically how credit repair companies work and how you can send your own letters at the site below. http://www.credit-info-site.com/creditrepairkit.html
- Most credit repair companies are scams. They make lots of promises but there is no secret. Get copies of your credit report (AnnualCreditReport.com). If there are any errors, send a dispute to the credit bureaus. -- doesn't have to be a letter. Doesn't even have to be complete sentences. Legitimate derogatory items will stay on your credit report for 7-1/2 years from the date of first deficiency.
- They can't. Some non-profit orgs can help negotiate with your creditors lower interest rates to pay off balances to avoid bankruptcy, etc. Credit repair companies advertise they can fix your credit where in fact the only thing that can be erased off your credit report is identify theft and charges not made by you. My best advice as a loan officer to repair your credit is get a couple of secured credit cards where you're putting collateral down. Since you're putting collateral down they won't run a credit check. Use the cards like regular credit cards and pay your balance off regularly. After 6 months of on time payments, normally banks will refund your deposit/collateral and typically raise your credit limit. If you can get 3 secured credit cards, each $300 each, this is FICOs magic number. Do as you can afford though. Time heals and normally after 24 months of on-time payments your score will improve dramatically. Everyone makes mistakes and credit bureaus understand this. Just keep positive credit from now on and your credit will heal itself but be patient. I have seen people wit 800 credit cards (nearly perfect) with 3 bankruptcies and secured cards are the magic trick.
- Ok, I can see that I am going to have to dispell the myths about credit restoration. A site I've used for info in the past ... http://debt.knowledged.info/credit_card.html Hope it all works out
