Understanding How Credit Repair Works

Basic articles, but sometimes we need to understand the basics....

What is Credit Repair?

The only way to repair credit is through the process of writing dispute letters to the three major credit reporting bureaus. Even if you call them on the phone, they will require you to send letters regarding any items you want to dispute on your credit reports. Though writing letters may seem like a simple step, repairing your credit is not. You usually have to send endless letters and the credit bureaus will often discourage you by refusing to investigate. This is where the law is on your side. You have the right to continue to dispute any incorrect items on your credit report and the credit bureaus are required to continue to investigate each and every item you are disputing.

Though the law is on your side, the Credit Repair process is frustrating and incredibily bureacratic to say the least. This is why there are thousands of companies that will handle Credit Repair for you. Others will sell you a Do-It-Yourself kit to help you clean up or repair your credit.

Credit Repair is Possible and Legal

Credit repair is not only possible, it is totally legal. The Fair Credit Reporting Act (FCRA) protects you. The FCRA maintains that the credit bureaus should always have an accurate and verifiable accounting of your credit history.

If at any time you determine that the information on your credit report is not accurate, then you can ask for an investigation. A credit bureau must respond to every request for an investigation and get back to you within a reasonable amount of time (usually within thirty days).

The credit bureaus must contact a company that has submitted an item you are disputing and ask for verification that the information on your credit report is accurate. Based on the company's response, the credit bureau will then leave unchaged, update, correct, or delete the item. If a company in question does not respond in a reasonable amount of time, then that item must be removed from your credit report until it is verified. A Credit Repair expert has experience in dealing with the Credit Bureaus and can usually get better results, faster than if you attempted to repair your credit on your own.

So, can credit repair companies really guarantee results?

Not a chance! No credit repair company is so good that it can guarantee a specific outcome. It would be like a defense lawyer guaranteeing that the jury will find his client innocent. Guarantees are a sure sign of credit repair fraud. A warranty, where the credit repair company promises a refund if certain results don't occur, is a better, more realistic claim.

Not surprisingly, the credit bureaus have declared war against the credit repair companies and those selling instruction on how to do-it-yourself. The bureaus lambaste credit repair companies in the media and send anti-credit repair literature to anyone whom they suspect of using credit repair services. The bureaus unflinchingly deny that accurate information can be removed from a credit report.

Some time ago, a couple in the United States who were using the services of a legitimate credit repair company, received a scathing letter of reproach from their local credit bureau. The letter chastened them for relying on the "unethical" methods of credit repair, and pointed out how all their efforts had come to nothing. "As you can see," the letter chastened, "your credit reports remain unchanged." The couple was bewildered because almost all of their many negative credit listings, including a bankruptcy, had long since been deleted.

The simple truth is that you do not have to endure bad credit for seven to ten years so long as you feel comfortable challenging the accuracy or verifiability of your credit listings. If so, it is possible to restore creditworthiness within a much shorter time.

However you decide to address your credit challenges, realize that regardless of what you may hear in the news media, thousands before you have sought help and restored their credit. They can show you their homes, cars, and credit cards. Despite the newspaper articles, TV reports, and other credit bureau propaganda to the contrary, the simple truth remains: you can restore your credit.