How do Credit Repair Companies Work?

Credit is everything within the modern world. The aspect of credit enables individuals to make investments, plan for the long term, and to meet shortfalls when their income is lower than their overall expenses. Yes, credit can impact almost every single element of one’s life.

For instance, did you know that if you want to fulfill your long-time dream of becoming a homeowner, you should build up your credit score? If you have a credit score of over 735, you can get better mortgage rates? Did you know that you can take advantage of great conventional loans for housing?

Of course, if you have a credit score below 740, you can still seek to purchase a home, but it may not be as favorable as when you have a better credit profile. From FHA loans to other options, you can still purchase a home, but having a good credit score always helps to improve your rates.

A fantastic credit score will also enable getting some of the best cards out there. This means that you can move forward with those cards that provide great benefits from points to protection and more.

Did you also know that that a good credit score will help you with other aspects of life, such as obtaining insurance, moving into a new apartment, or even starting a new venture? It is hard to discount the value of good credit.

If you seek to obtain better credit, here is what you must know about working with credit repair companies.

The Fundamentals of a Credit Repair Companies

Before jumping to the conclusion of how credit repair companies work, we should understand what credit repair companies are and how they are related to you. Further, we will look into the kinds of ways they work to solve various problems. 

What are credit repair companies?

A credit repair company is an organization that helps you with your credit report-related issues. A credit repair company analyses your credit report and enables you to repair your credit. In addition, they also sort out disputes of inquiry between you and the lender or between you or the credit inquiry agencies.

One hires a credit repair company when the dispute between the lender and the person is quite complicated. In addition to this, you can hire an expert from a credit repair company if you do not have any fair knowledge about how a credit-related issue is resolved. 

What will the credit repair cost you?

Many credit repair questions may come to mind. Before hiring a credit repair company, take a look at how credit repair companies work. One of the most repetitive credit repair questions we encounter is what will the credit repair cost you.

You can pay the credit repair company in two ways. One way is “pay per delete,” while the other is the garden variety subscription service.

With a subscription service, the credit repair company will charge your credit card at the end of the month. The company’s services to you the previous month will be charged regularly. It can cost you around $100 per month. But it will vary on the credit repair company.

The second method is known as the pay per delete method. This method is quite simple. According to this, you will only be charged by the credit repair company according to the effort they made.

This means that they will only set you if they deleted a hard or soft inquiry or a pursuant. Most of the really solid credit repair companies are monthly subscriptions.  

The Dos and the Don’ts of Credit Repair Companies

Let’s start with the do’s of credit repair companies: 

1. Make sure that they have been in business several years.
2. Make sure they can prioritize what needs to be done first in your credit report. 
3. Go with a well-established company that has been reviewed. 
4. Make sure they are patient and persistent. 

The credit repair companies do not work on their own, without regulations. Instead, they are obliged to follow a set of rules and regulations set by The Federal Credit Repair Organization Act, also known as the CROA. The CROA answers all the credit repair questions you might consider before hiring someone from a credit repair company. 

The CROA restricts the credit repair companies to a certain extent. These firms can be sued if they abstain from following any rules directed by CROA. In addition, the customers have the right to dispute their personal credit information for free.

Moreover, the company should follow proper procedures to maintain accuracy and prevent mistakes. 

The following set of points include the dont’s of a credit repair company:

1.  Credit repair companies cannot influence or advise their customers to make false accusations or statements related to credit reporting agencies.
2.  Credit repair companies cannot guarantee their customers that they will remove any information from the customer’s credit report.
3. Don’t dispute positive accounts. 
4. Don’t send blanket canned letters. 

How do credit repair companies work?

Credit repair companies do not do anything extra-ordinary rather; they have a formal and legal way to get you out of the inquiry and maintain or improve your credit score. 

They are valuable because they are efficient. They have systems that have been created over time. Much of which if trying to create them on your own would be VERY tedious and time-consuming. 

Here is what you need to know about how credit repair companies work.

Credit repair companies work by communicating with the credit agencies/ credit bureaus and companies that link your credit information with the bureaus. 

The companies which linked or connected your credit information with the bureaus are often organizations such as banks, companies aiding people financially, or credit card issuers. 

Credit repair companies try to work in ways that ultimately favor the customers. They either work by deleting the credit information or asking the credit agencies/ bureaus to modify it to benefit the customer. 

The ways through which credit repair companies communicate with the credit agencies/ bureaus and credit lenders can be simply through a phone call, email, or any reasonable means of communication.

However, a certified email is preferred in many cases as it is an official and formal way to communicate. In addition, anything exported or imported, including files and documents through the certified email, is usually recorded as well. 

How efficiently do credit repair companies work?

So far, we have understood the ways credit repair companies work. But how efficient and effective are they really. They answer to that is the right ones are extremely effective.

Not only have I used them in the past to great success, but I know many others personally who have also had similar experiences using the right company.

Make sure to go with the top credit repair companies with a proven track record. There are a handful of really good ones out there, which have been listed and reviewed by us.