How Do Credit Repair Services Work?
Life has a way of being unpredictable; anything from an illness to an unexpected job loss can quickly destabilize your personal finances and wreak havoc on your credit.
Derogatory items on your credit report can report for up to seven years, so a short-term issue can turn into a longterm problem.
A credit reporting agency, like any other agent, acts on the behalf of its clients. Agents typically have ample experience in law or finance.
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They have acquired specialized knowledge and have access to resources that a layman does not, so they’re better equipped to repair damaged credit than someone doing the “do it yourself” approach.
So, How Do Credit Repair Services Work? You Can Start By Setting Goals…
The first priority is setting goals. People who are conscientious of credit typically have an agenda. Whether it’s buying a car, buying a house, or getting better rates on a credit card, so people seeking professional help usually want something.
Credit agencies start your program by learning what you are looking to achieve, then tailoring your program to accomplish those specific objectives.
For example: If you’re looking to buy a house, a public lien is top priority, as you typically cannot buy a house if any liens are reporting to the credit. Whereas, if you’re just looking to improve the overall score so you can brag to your friends about your FICO, clearing aged liens would not be so helpful.
Credit scores are very complicated (thats an understatement, right?)
They are computed using advanced mathematical algorithms. Credit repair agencies use sophisticated systems to predict how the credit will adjust or react to certain changes.
In essence, they have a birds-eye view of the fastest route to a better score. Just as you provide the agency your goals, the agency will then provide you with a set of specific instructions.
It can be something as simple as paying down a credit card or canceling an account, but in almost every case, they will tell you something you need to be working on.
Erroneous!… Get Those Credit Disputes
Once clear objectives are identified, the credit agency will initiate a series of disputes with the three credit bureaus.
The purpose of this is to remove as much derogatory or inaccurate information as possible.
For example: Derogatory information after seven years is supposed to stop reporting.
Many times bankruptcy attorneys forget to remove old judgements or liens, which should be removed if filed prior to a bankruptcy.
Every item that is removed from the report improves the score. If all collection accounts are removed, you would see significant immediate results.
Late payments, particularly 90-day late payments, can also significantly improve credit when removed from the report.
Don’t Be Afraid Of A Little Coaching & Education
(You’re here so, you’re already on the right track)
Once every 30 to 45 days, the credit reporting agency will review your progress with a fresh credit report. Keep in mind, the credit reports that credit agencies use are soft pulls, so they do not affect the score.
By this time, you will have already been educated on you what your priorities should be, but they will coach you through the process, providing tips, professional advice, and motivation.
They will continue to notify you of any changes to the report, including any disputes that were successfully removed.
A personal trainer wants you to lose that extra weight, but really their goal is to get you living a healthier lifestyle.
Much like a personal trainer, a credit reporting agency wants to condition you to develop healthier personal finance habits.
Even after credit agencies help you achieve your specific goals, they will likely stay in touch, providing helpful hints to help maintain a strong credit profile.
Keep in mind, building up positive credit history is equally as important as removing the negative. How do credit repair services work?… a little know-how and a lot of coaching and educating.