How Do Credit Repair Agencies Work?

These companies help consumers whose credit histories are tarnished. Their mission is to restore scores by deleting inaccurate information stored by the three nationwide bureaus. But how exactly do these specialists work, and are these services worth the money?

The Premise

Your borrowing history is compiled by Experian, TransUnion, and Equifax. Each of the agencies collects information independently. Any of the histories may contain errors ranging from misspellings to false bankruptcies. However, according to the Fair Credit Reporting Act, the bureaus are obliged to provide only accurate information and remove unverifiable items. This is the premise that makes the restoration possible. 

These services are provided all across the United States. For example, credit repair Atlanta services include the same stages as elsewhere — collection, analysis, proof, and disputes. Some of the most popular companies, such as Lexington Law, have been in business for over a decade.
 

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Can I Fix My Own Score?

Yes, this is also feasible. The reason why people delegate repair to professionals is that it saves them a lot of time. Unless you are knowledgeable about consumer credit laws and relevant correspondence, the DIY restoration will be a hassle, particularly when there are several mistakes to erase.

You can discover your official score online or via apps like Credit Sesame or Credit Karma. On the www.myfico.com site, you can also find this information. Both FICO and VantageScore, the most popular systems in the United States, rely on a scale from 300 to 850. They consider a similar range of factors to come up with a score, from the way you made the payments in the past to the range of credit products in use.

By law, every citizen of the United States is entitled to a free copy of each of the documents once a year. Now, due to the economic hardship as a result of Covid-19, the service is provided weekly. To collect your own histories, head to the only official source at www.annualcreditreport.com and submit a simple application. 

After downloading the files, you should scrutinize them line by line to establish any inconsistencies. Any outdated or unsubstantiated information may be disputed formally. The Federal Trade Commission even offers a free template to help you draft the letters.

Restoration Process Step by Step 

Whether you fix this core by yourself or enlist the help of professionals, the fundamental logic is the same. The information should be collected, analyzed, and disputed. Here is how this works in practice.

Step 1. Obtaining the Information

If you delegate the job, your hired experts will collect your reports for you. Any firm will look at information from all three sources, which gives a full picture of where you stand and why your score may have fallen. The bureaus don't share information, and they must be contacted separately.

Step 2. Analyzing the Data

The experts will examine your histories line by line to determine anything suspicious. Generally, disputable inaccuracies fall into the following categories:

• Accounts that do not belong to you
• Absence of verifiable positive events in your borrowing history
• False legal events, from judgments to bankruptcies
• False missed or late payments
• Misspellings, etc.

You may even discover that you have been a victim of identity theft. If your score falls for no apparent reason, fraudsters may have taken out loans in your name. The more often you collect and analyze your records — the easier it is to deal with any errors.

Step 3. Collecting Evidence

Next, the experts will gather evidence to prove that the items in question are false. They will reach out to your lender by means of debt validation letters. These request proof that you owe the amount they reported. If the information is not verified, the bureau will remove it. Bank statements and other official documents can serve as evidence, and they are submitted along with the dispute letter in Step 4.

Step 4. Formal Disputes

Finally, all the team will send formal dispute letters to the bureau or bureaus involved. The law gives every agency 30 days to conduct its internal investigation and provide a formal reply. The bureau may accept the changes and send you a free copy of the revised report. 

Alternatively, it will reject the claim or ask for additional information. Another advantage of professional services is that experts are more likely to collect sufficient evidence from the first attempt, so there is no need for redisputes.
 

Source: Pixabay
 

Final Words

As you can see, history repair is a four-step process, but companies do not have a monopoly on it. You, too, can find and dispute any information from any of the agencies. There is no shortage of detailed guides online.

The key advantage of delegated repair is that you save time and spare yourself the hassle of liaising with the institutions. Trusted fixers will request corrections on your behalf, giving you a score boost. In addition, you may get a bundle of extra services depending on your level of repair. These may include the official FICO tracking tool, TransUnion alerts, identity theft protection, personal budgeting aids, etc.