Credit repair is a large industry, and the services are in high demand. Many Americans suffer from unfair credit scores, which are caused by inaccurate histories. Any credit bureau — TransUnion, Experian, or Equifax — can make mistakes that will tarnish your status. Professionals offer to remove them as soon as possible. But how exactly does this work?
What Score Is the Best?
The end goal is to give your score a boost. This concerns all calculation systems. Currently, the most common ones are FICO and VantageScore. Both use the official reports compiled by the three agencies. Reliable credit repair services reviewed by creditfixed.com deliver the quickest results. The strategy, however, depends on where you stand.
Both systems rely on a scale from 300 to 850. Generally, 800 unlocks the best possible conditions, as lenders simply do not price their products for clients with more points. A good FICO score starts from 670 and very good from 740. This classification defines the objectives of repair of bad credit in the United States.
Some lenders may accept less, particularly when the loan (such as a mortgage) is insured by the government. For example, an FHA mortgage with a 3.5% down payment becomes accessible with 580, which is merely fair. However, it is still advisable to raise the score as much as possible. It is also used by landlords, insurance companies, and employers to compare candidates. The lower the total — the less reliable you look.
Overview of the Process
Credit repair is only possible when the reports contain errors. This is quite common. In fact, according to the Federal Trade Commission, around 20% of Americans have unfair scores. If this is the case, you need to find the most damaging derogatories, prove that they are false, and open formal disputes. Here are the key stages of repair.
1. Data Collection
Contacting every agency separately is unnecessary. Until April 20, 2022, you can download all three reports at once every week. Previously, the service was only rendered once a year. The www.annualcreditreport.com site is easy to use. Anyone can get their data quickly after submitting a simple form. Repair professionals will obtain the documents for you.
2. Data Analysis
Some mistakes are more damaging than others. For example, 35% of the FICO score depends on your history of payments. As a result, missed or late payments are the most influential. The team will prioritize such errors to achieve the quickest possible boost.
3. Evidence Collection
It is the tricky part. The bureaus take action when they are presented with sufficient evidence. Bank statements and other information from your lenders should convince them from the get-go. Otherwise, you will be asked for additional proof, and such back and forth will cause lengthy delays. This highlights one of the main strengths of professional repair. Experts know what documents are required, and they will build the case on your behalf.
4. Formal Disputes
To communicate with bureaus, experts compose letters of a particular format and provide relevant evidence. Usually, correspondence is sent by certified mail with a return receipt requested. After a bureau gets the letter, it has 30 days to conduct an investigation. If the conclusion is in your favor, the mistakes disappear, and your score grows instantly. You should receive a free copy of the amended document.
5. Additional Services
Professional credit repair is not limited to analysis, evidence collection, and disputes. Most companies offer three tiers — basic, intermediate, and aggressive repair. Extra services are divided between packages.
At the very least, you should be able to track the status of your case using the company’s app or web portal. Additionally, the provider may offer score monitoring tools, identity theft protection, personal budgeting tools, a special credit line, and more.
How Long Does It Take?
Fixing a score is not an overnight process. The bureaus have 30 days to investigate each claim, and the repair provider will also need to collect the evidence. On average, the first results may be observed in one and a half months. The more often you check your reports and fix them — the easier it is. Unfortunately, the current system is imperfect, so any of your histories could be flawed once again.
How to Choose a Company
Repair firms are not created equal. To compare providers in your state, use expert reviews, customer feedback, and the official BBB information. Accreditation is not necessary, but the Better Business Bureau informs users of any problems with the services. Its profiles show the number of complaints over the past 3 years, and any legal action against the companies.
Only some providers have a money-back guarantee, and this is something to look for. If the experts you hire are inefficient and no derogatories disappear within the first 60 or 90 days, you should get a refund. It will give you peace of mind.