So you’re ready to get serious about fixing less-than-perfect credit? And weighing your options, researching companies, and want to make sure you hire the right firm, that can and will get the job done?
Good, you’re in the right place. In this article, we’re going to go top to bottom over legitimate credit repair companies including how they work, what they do, the eight signs of legitimate services, and the best firm. Along with some indicators of companies that may be working outside the law.
Legal Credit Repair
Legal credit repair is going to use your rights as a consumer, under both federal and state law to ensure your credit report is 100% accurate, only contains verifiable information, and is fair and substantiated. You see, there are strict guidelines the credit bureaus and data furnishers must follow.
The two big pieces of legislation most often used are the Fair Credit Reporting Act (FCRA). This federal legislation is what allows each and every one of us to dispute and challenge any item on our credit reports, so long as we believe it’s inaccurate, misleading, or made in error.
The Fair Debt Collection Practices Act (FDCPA) is federal law that’s supposed to regulate the debt collection industry. Both these laws have many aspects to them, and are worth further review. The FDCPA, enables us to request validation for any and all of your alleged collection accounts, more on both of these coming up.
In brief, other laws may also be deployed on your behalf. For instance, the statute of limitations is a state law that says exactly how long you’re legally responsible for repayment of most debts. This is a frequently violated piece of legislation by the collection industry.
In full disclosure, there’s a whole pot of alphabet soup laws, that can and may be used on your behalf. Which is part of the benefit of working with legitimate credit repair companies, because they should be experts in all the relevant consumer laws, and knowledgeable about your many consumer rights.
For example, on July 1st, 2017 all three credit bureaus implemented new data standard requirements concerning public records on credit report files. In short, they’re requiring a modicum of information which many public records don’t contain.
For the uninitiated public records include bankruptcies, tax liens, civil judgements, foreclosures, and wage garnishments. This means, it’s easier than ever before to remove judgements from credit report files, along with tax liens, foreclosures, and yes even credit repair after bankruptcy is a reality today.
Do Credit Repair Companies Work?
In short, yes. In 2016 alone, legitimate credit repair companies helped consumer’s remove over 9 million negative items from their credit reports. However, this is no guarantee of any specific outcome for your unique case needs.
Credit repair companies don’t have a magic wand, or flying carpets. They can’t remove any or every negative item from everyone’s credit reports. All legitimate and reputable firms can do is exercise your rights, to make sure you have a 100% accurate, verifiable, and fair credit reports.
While legitimate credit repair companies can help with removing negative items from your credit reports, and even dealing with debt collectors. The one thing they can’t do on your behalf, which is essential to getting an excellent credit score is build credit.
This is something you’ll have to do, and it’s most effective if you do it simultaneously. And this can be done, as easily as making sure to make on-time monthly payments, because that will create a trail of positive payment history on your credit reports.
You should also see your credit score improve if you have or get a credit card, of course with your on-time monthly payments. But, this can also improve your amounts owed category, worth roughly 30% of your FICO score, if you keep low monthly balances.
Your amounts owed category looks at all your total debt, and compares that to your available credit. If you have a $1,000 limit on your credit card, and a $250 monthly balance, then you’d have $750 of available and unused credit.
If you were to apply for financing, with $750 of available credit, you’d appear in a lot more secure financial position compared with the fella who’s credit card is maxed out. It makes sense, and this is something only you can do.
8 Signs of Legitimate Credit Repair Companies
1. Credit Repair Organizations Act (CROA)
Yes, more alphabet soup laws, but this one is designed to regulate the credit repair industry. Like all businesses, there are some bad apples, and the credit repair industry is no different.
The Credit Repair Organizations Act (CROA) says some basic things. In short, credit repair companies are required to be upfront, honest, work legally, and ethically, and do what they say they’re going to do. There’s much more to it and worth reviewing in detail at your convenience.
2. No Guarantee of Specific Results
Listen, no legitimate credit repair company can guarantee any specific result. In other words, they can’t guarantee that they will be able to remove charge offs from credit report files, for example, or remove a repossession or any other such item.
They just can’t. It’s unethical, and it’s not true. You can and should look for some sort of money-back guarantee, and one very reputable firm will guarantee they can remove erroneous items from your credit reports in the first 90 days of service. But nobody can guarantee specific outcomes or the removal of specific items.
Further, you should be able to cancel the service at any time. And it may be worth looking for some form of refund or satisfaction guarantee. Along, with keeping your information private and secure, and that you’ll be treated professionally and given the respect and dignity we all deserve
3. No File Segregation
One of the common tactics, bad apple credit repair companies, will use is called file segregation. In short, this is when they try and circumvent your current credit reports, and start over fresh. Often, this involves using an Employee Identification Number (EIN) or in some cases even a new Social Security Number (SSN).
This is illegal. Both for the company to do, and offer, but it’s also illegal for you to do. And could put you in a position where you’re criminally liable, depending on how you use your credit. It sounds great, but legitimate credit repair companies will work with your real identity, and work fixing your credit report dings, blemishes, and removing the negative items.
4. Do It Yourself
Yes, credit restoration isn’t a job you have to hire someone to do for you. Much the same way we don’t have to pay someone to cut our hair, change the oil in our car, or heck even make our toilet paper. You can do this yourself.
And if you’re cool with using pine cones to wipe your butt, you just might want to pursue this path. Okay, that’s a bit of an oversimplification.
But truly, if you change the oil in your own car, cut your own hair, and find yourself sharing the same sentiments as Dwight Schrute of The Office TV show and refuse to tip or pay someone for a job you yourself can do? Then going alone may be right for you.
The truth is professional credit repair companies aren’t for everyone. They’re not for people who don’t take their credit and their finance’s seriously. They’re not for irresponsible people who’ve yet to mature or grow up.
They are for responsible, hard-working, decent folks. Those people who as a result of the lemons in life be it a divorce, illness, job loss, etc. know that bad things happen to good people.
They are for folks in the process of getting ready to buy a home, get a car loan, or make other significant purchases where a few credit score points can equal thousands of dollars in interest.
And of course, for folks that value the genius that went into the invention of toilet paper. Those that value the hair-stylist, the waiter, the mechanic, and countless others that bring value, ease, and convenience to our daily life, and every day.
Should you choose to go at this alone. The three most important elements are your knowledge of the continuously evolving credit and debt laws. Along with organization and persistence. It’s not an easy road for anyone, and especially if you’re doing it alone.
5. How Much Does It Cost?
Legitimate credit repair companies are reasonably priced. Generally, there will be a one-time case intake or first work fee charged, this should be in the ballpark of $100 to $200. Then around a $100 a month, thereafter.
In total, you can anticipate paying a few hundred dollars, over a few months. For extreme cases and people that need services for a year, maybe even longer, then you may reach a thousand bucks or a little more, again spread out in monthly payments.
Beware, this is not an expense that should cost big money. This is a small, reasonably priced investment. The less ethical companies will charge folks thousands of dollars to start, hourly rates, or just sky-high credit repair bills.
When all is said and done, you’re looking at a very reasonable cost, of a few hundred dollars, spread out in monthly payments. And should your case require a personal attorney, he should collect his payment, just like the personal injury attorney’s do, in the settlement. Not upfront.
6. How Long Does It Take To Repair Credit?
For most folks, and with aggressive, knowledgeable action they can see significant credit score improvement in as little as 90 days. However, a more accurate answer is somewhere in the ballpark of six to 12 months.
It depends on your exact case needs. If you have minimal damage, then you may only need three months. And some folks with more dire circumstances may need longer than 12 months.
It won’t happen overnight. It’s safe to plan on the ballpark of using the service for nine to 12 months, roughly. Check out our article for more details about how long does it take to improve credit score?
7. Better Business Bureau (BBB) Rating?
It’s also wise to take a moment and check out any potential credit restoration service and their rating with the Better Business Bureau (BBB). This isn’t foolproof, but it is one more worthy resource to help the process.
8. What Do Past Client’s Say?
Again, this isn’t foolproof but can be very helpful to see what past clients have to say. Not just from the company itself but also the Google reviews, consumer reports reviews, and any other authoritative, trusted, and worthy source of real information.
How Do Credit Repair Companies Work?
Now, let’s roll up our sleeves and discuss exactly how do credit repair companies work to fix your credit score. And we’re first going to share how they’ll work if you’re currently dealing with collection agencies and aggressive debt collectors.
The FDCPA is the federal legislation we’ll use here, and beginning with a debt validation request. This is your right as a consumer, and how we make the collection agency prove this is legit debt, and everything’s on the up and up.
If they fail to validate your account, then the debt is legally forgiven. Moreover, they’re supposed to contact all three credit bureaus to have them remove collections from credit report files, regarding this account.
If you have some legitimate collection accounts, after first performing the necessary due diligence it may be in your credit report and credit scores, best interest to pay off collections. Because when done properly this can be an effective way to clear credit report dings, blemishes, and remove negative items.
The primary method credit repair companies will work is to focus their efforts on getting you a clean credit report by exercising your consumer rights under the FCRA. This is the federal legislation that enables us to dispute and challenge items on your credit report.
When it comes to how to dispute credit report items, there are some basic fundamentals we need to share first. According to the FCRA, you can dispute any item you believe is ambiguous, misleading, inaccurate, untimely, biased, unclear, incomplete, or made in error.
Technically you’re not supposed to dispute an item you know to be 100% accurate. But, to fully discuss this we have to define the term accurate, which is a slippery slope we’re going to avoid here.
The point is that not only is your credit report supposed to be 100% accurate, it’s also supposed to be fair. Moreover, every item on your credit report is supposed to be verifiable. Verifiable means the company reporting that information is also supposed to have a record of the account, and be able to confirm the details.
We share this to dispel the common notion that it’s somehow illegal to dispute or remove bad credit before the maximum seven-year time window. When you dispute any item on your credit reports, you’re simply exercising your consumer rights. So for anyone to say it’s illegal, is tantamount to saying it’s illegal for women to vote. Come on, man!
And the FCRA does say seven years is the maximum amount of time most items can remain on your credit report, true. But did you catch that, because most people don’t?
Seven years is the maximum. There is no minimum amount of time a negative item must remain on your credit report. Look, if O.J. can get out of prison early, we’re confident you and your credit report should be able to get out bad credit prison early too.
The takeaway is it’s not illegal to dispute any item on your credit reports. And you don’t have to live with a bad credit rating for seven long, expensive, and embarrassing years.
We also need to share there have been amendments made to the FCRA, since it was originally passed way back in 1970. Today, in addition to the credit bureaus, you can also dispute a data furnisher directly.
A data furnisher is the company reporting the information about your account. This is ideal for situations of identity theft and other extreme cases. Traditionally, and for our purposes here, we’re going to discuss the credit bureau dispute process.
There’s three ways to dispute credit report items: online, over the phone, and by mail. Once the credit bureaus get your dispute, and they first have to find it valid, which is another conversation for another time and place.
So make sure to sign up for our free newsletter for more help with credit repair with Dan Willis, and join our congregation. Once the credit bureaus get your dispute and deem it valid, they’re required to investigate the item.
They call it a re-investigation. Nevertheless, they’ll contact the data furnisher (company reporting your account information) and request they verify the account. If it’s verified, it will remain on your credit report, and could be updated with accurate information.
The more common result of these re-investigations is the item is not verified, and thus in compliance with the FCRA, the credit bureaus must remove the item from your credit reports. This is how to clear credit history dings, blemishes, and remove negative items, and legally.
The big challenge comes in getting the credit bureaus to deem your dispute valid, and subsequently, investigate the item. This is for a variety of reasons, the most basic, and the one you’ll rarely hear is because it costs the credit bureaus money to investigate and correct consumer’s credit reports.
This money is otherwise profit. The credit bureaus have stockholders. They’re for-profit businesses, and earn an estimated $4 billion in annual sales. Not one penny of this money comes from correcting consumer’s credit reports.
This is why Congress felt it necessary to pass federal law requiring the credit bureaus to do this, and over four decades ago. Again, something you’ll rarely hear discussed is the credit bureaus have been fined repeatedly for violating the FCRA, and consumer rights.
In just 2015 all three credit bureaus collectively agreed to settle and pay $6 million to 31 state attorney general’s for violating the FCRA, and allegedly ignoring consumer disputes. You may have seen a 60 Minutes episode featuring this story, in recent years.
This is in addition to repeatedly being fined by our government the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB). And individual consumers.
You see, the way it usually goes is the credit bureaus will find your dispute frivolous and they’ll request more information from you. It sounds reasonable, but it’s nothing more than a stall tactic. Their hope is you’ll just go away and live with bad credit.
And most people do. The smart folks, will often turn to professional and legitimate credit repair companies, rather than give up. You should comply with their request, but you need to understand the nature of the beast.
The best example was just a few short years ago in 2013 and with a woman Julie Miller. She woke up one day to discover 38 collection accounts on her Equifax credit report. So she did what she was supposed to and followed the letter of the law, and filed a credit report dispute.
For the next two years, Equifax continued to find Julie’s dispute frivolous, despite her complying with their additional requests for information. She sent them W-2’s, paystubs, hair samples, DNA, and everything they asked for.
Don’t worry, they didn’t really ask for her DNA or hair samples. The point is they were simply giving her the run-around. This is why after two years, Julie got fed up and sued them. She won and was awarded $18.6 million.
This was later reduced by a federal judge to $1.8 million. However, the $1.6 million in punitive damages is a full nine times the compensatory damages.
In other words, even a federal judge felt that Equifax’s behavior was so obnoxious, the annoyance of it was worth nine times the amount as the actual life damages to Julie Miller. That’s a statement.
Hopefully, your credit situation isn’t as dire as Julie’s. We share this, in the spirit of the timeless book The Art of War. You must know your adversary before going into battle.
The Best Credit Repair Company
There’s many good, effective, and legitimate credit repair companies. However, the best credit repair company is The Credit Pros. They’ll not only work with debt collectors on your behalf, their results speak for themselves.
Because they’ve helped client’s successfully remove late payments, collections, charge offs, judgements, liens, repossessions, foreclosures, even bankruptcies, and more. They also offer a one-of-a-kind money back guarantee, in the spirit of getting you results.
So if after 90 days, they’ve been unable to legally remove erroneous items from your credit reports, they’ll give you a full every nickel refund. They have an A+ rating with the Better Business Bureau.
And offer two payment options, for folks with a number of credit report dings, you can enroll in the $99 monthly program. Alternatively, for those folks with just a ding or two, they can choose the pay-for-results program.
Ask about this program, but essentially, you’re only responsible for payment after they successfully remove an item from your credit reports. And of course, if you just want to pay this way too, that’s fine. For full details check out our Credit Pros review article.
You can repair bad credit and long before just waiting seven long, expensive, and embarrassing years. And in some cases, even longer. You have a plethora of consumer rights, and alphabet soup laws to deploy.
That said, it’s naive to believe the credit bureaus overnight became your friend, or mine, or any consumer’s. They’ll investigate items, and correct consumer’s credit reports, reluctantly, and only because federal law requires them to. And even that’s debatable.
Whatever you do, don’t just live with less-than-perfect credit. You’re too valuable. Your future, your dreams, your hopes and ambitions, all too valuable. Most of all your family’s financial future is way too valuable.
Don’t lose sight, you’ll also need to build credit, to get the sky-high credit score you deserve. And that part you’ll have to do on your own. Legitimate credit repair companies can effectively help clean up credit report dings, blemishes, and remove negative items.
Keep in mind, your credit score is a lot like your Grade Point Average (GPA) in glory school days past. It doesn’t matter if you’re acing all your courses, if you’re failing The Art of Walking, because this negative mark is going to ruin your overall GPA.
This is also true of your credit score, and why it’s of such paramount importance to clean credit history dings, blemishes, and remove negative items. We encourage our members to consider professional, legal, and legitimate credit repair companies to help with this.
Because in 2016 alone, over 9 million negative items were removed from consumer’s credit reports. One of the best firms is The Credit Pros. They’ve helped client’s successfully remove late payments, collections, charge offs, judgements, liens, and so many more negative credit report items.
Get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more tips, techniques, and strategies about how to improve credit score with Dan Willis, sign up for our free newsletter and join our congregation.
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