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How Does Credit Repair Work

By: Daniel Rosen Last updated: April 2, 2024

Ever found yourself in a situation where your credit score isn't quite where you'd like it to be?

Don’t worry, you're not alone!

Many people face this challenge, and it's important to know that there are solutions available.

Credit repair is a crucial process for anyone looking to improve their credit score. It involves identifying and addressing issues on your credit report that might be negatively impacting your score.

This process can be time consuming and complex. That's where credit repair companies can prove to be vital. 

These professionals have the expertise to navigate the credit repair process, helping people like you improve your credit score and secure your financial future.

In this blog, I'll explore:

  • What is credit repair?

  • How credit repair works

  • How long it takes to repair credit

  • Do credit repair companies work?

So, whether you're new to the concept of credit repair, or just looking for more in-depth knowledge, you're in the right place. 

Let's get started!

 

What Is Credit Repair?

Your credit score is a numerical representation of your creditworthiness, and it's used by lenders, landlords, and even some employers to make decisions about your reliability.

A lower score can make it harder to secure loans, rent a home, or even land a job. So it's crucial to ensure that your credit report is as accurate and positive as possible.

In its simplest form, credit repair is the process of identifying and addressing any errors or outdated information on your credit reports that may be negatively impacting your credit score. This is a crucial step in repairing your credit..

Credit repair is not just about fixing mistakes, though.

It's about making sure that your credit report accurately represents your credit history. This includes making sure positive credit behaviors — like making payments on time — are properly reported.

Essentially, It's about taking control of your credit and working towards a brighter financial future.

How Credit Repair Works: The Process Explained

Understanding the credit repair process is key to taking control of your credit. It may seem daunting at first, but when broken down into steps, it becomes much more manageable.

Let's walk through this process together:

Step 1: Obtain Your Credit Reports

The first step in the credit repair process is to obtain your credit reports. You're entitled to a free copy of your credit report from each of the three major credit bureaus, or you can use Credit Repair Cloud to access them all in one place.

Step 2: Review Your Credit Reports

Once you have your reports, it's time to review them carefully.

Look for any inaccuracies or outdated information — this could include incorrect personal information, accounts that aren't yours, late payments that were actually on time, or negative items that should have aged off your report.

Make a note of any errors you find, as these will be the focus of your credit repair efforts.

Step 3: Dispute Inaccuracies

If you find any inaccuracies on your credit reports, the next step is to dispute them. This is where you write a dispute letter to the credit bureau that provided the report. 

In your letter, clearly explain the error and provide any supporting documentation you have. The bureau then has 30 days to investigate your dispute and either correct the error or provide a reason why they believe the information is accurate.

Step 4: Follow Up and Repeat

After you've sent your dispute, it's important to follow up.

If the bureau corrects the error, you should see an improvement in your credit score. If they don't, you may need to provide additional information or escalate your dispute.

Remember, credit repair is a process. And it can take several rounds of disputes to see significant changes.

Step 5: Maintain Good Credit Habits

While you're working on repairing your credit, it's also important to maintain good credit habits. 

This means paying your bills on time, keeping your credit utilization low, and not applying for new credit unless necessary. These habits will help to improve your credit score over time and prevent new negative items from appearing on your report.

In essence, credit repair is a proactive approach to managing your credit. It involves identifying and addressing issues on your credit report that could be negatively impacting your score. While it can be a complex process, with patience and persistence, it's a powerful tool in improving your credit and building a brighter financial future.

How Long Does It Take to Repair Credit?

One of the most common questions about credit repair is, "How long does it take?". 

But the answer isn't as straightforward as you might hope. The duration of the credit repair process can vary a lot depending on a few factors.

Firstly, the complexity of the issues on your credit report plays a significant role. If you're dealing with a few simple inaccuracies, such as a misspelled name or incorrect personal information, these can often be resolved relatively quickly.

More complex issues, though, like disputing negative items or dealing with identity theft, can take much longer to fix.

Secondly, the response times of the credit bureaus will influence the duration of the credit repair process. When you submit a dispute, the credit bureau has 30 days to investigate.

Sometimes they’ll respond quickly and correct the error. But sometimes it may take the full 30 days, or even longer if more info is required.

It's also important to note that credit repair isn't a one-and-done process. It may take several rounds of disputes to fully address all the issues on your credit report. And even after these issues are resolved, it takes time for your credit score to reflect these changes.

So, while it is possible for some credit repair actions to result in quick resolutions, in most cases the process can take a few months.

This is why patience and persistence are key when it comes to credit repair. It's not about quick fixes, but about ensuring your credit report is a fair and accurate reflection of your credit history.

Do credit repair companies work?

There are benefits to tackling credit repair on your own, but there are also several compelling reasons to consider hiring a professional credit repair company.

Credit repair companies bring a wealth of expertise and experience to the table. They have a deep understanding of the laws that govern credit reporting and can leverage this knowledge to your advantage. 

They are well practiced at identifying inaccuracies, and know how to dispute them effectively.

Also, the process of credit repair can be time-consuming. 

Reviewing credit reports, writing dispute letters, and following up on disputes requires a significant investment of time and effort. A credit repair company can shoulder this burden, freeing you to focus on maintaining good credit habits and getting on with your life.

Beyond the immediate process of credit repair, these companies can also provide ongoing support and guidance. They can demystify your credit reports, offer advice on boosting your credit score, and provide strategies for managing your credit in the future.

This ongoing support can be invaluable not just in repairing your credit, but also in maintaining it over the long term.

BUT it's also crucial to remember that not all credit repair companies are created equal.

You need to choose a reputable company that follows ethical practices and has your best interests at heart.

Look for a company that’s transparent about their services, provides a clear contract, and avoids making unrealistic promises about quick fixes or guaranteed results.

While DIY credit repair is an option you should consider, the benefits of using a professional credit repair service are clear. They offer the expertise, time, and support needed to effectively repair your credit and help you work towards a brighter financial future.

So when asked, "Do credit repair companies work?", the answer is that with the right choice, the answer is a definite yes.

Frequently Asked Questions about How Credit Repair Works

Is it worth paying someone to fix your credit?

Yes, if you lack the time or expertise, a reputable credit repair company can be a valuable resource.

Are credit repair companies legit?

Many are, but it's important to research and choose a reputable company that follows ethical practices.

Can credit repair remove debt?

No, credit repair can't remove legitimate debt. But it can help correct inaccuracies affecting your credit score.

How do you fix badly damaged credit?

Start by reviewing your credit reports, disputing inaccuracies, paying bills on time, and reducing debt.

What should you do now?


 

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Topics: Podcast

Transcript

Daniel Rosen  00:00

If you are new to credit repair, you're probably wondering, does credit repair really work? And is it legal? And the answer to both of those is, yes, not only is credit repair legal, but it actually works because of the law. That law is called the Fair Credit Reporting Act. And it gives you the right to dispute anything on a credit report. And if they can't prove it, they must remove it. And the reason it works is because most credit reports have errors. They just do the credit bureaus, they make a tonne of mistakes. And those mistakes, they lower your score. Now, you're probably wondering, what about negative items on your credit report that are not mistakes? What about negative items that are accurate and true? What about those, can those be deleted? Well, the answer again, is yes, yes, they can. The key here is that even though they are accurate, there is often something inaccurate about how they are being reported. So how do you remove those negative items from your credit report and make the score go up? Well, today, I'm going to break it down into five easy steps that anyone can do. So you better stick around. So the big question is this, how can we take our passion for helping people with their credit, and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets. Okay, before I dive in, if you are new to my podcast, be sure to click to subscribe and turn on notifications so you don't miss a thing. And if you want me to hold you by the hand, as you launch your very own credit repair business, go to credit herochallenge.com, where I will walk you through the proven process that has created millionaires and change 10s of 1000s of lives. That is creditherochallenge.com Oh, and one more thing, and I love this part. Every episode, I am featuring one of our credit heroes inside our Credit Repair Cloud Facebook community so that you can see firsthand what real people are doing as they launch and grow their business. And today's spotlight is on Gabriel Barreiro who wrote this in our community. My name is Gabriel Barreiro, I welcome you all to Modesto credit solutions. I got my little office set up last night, I passed merchant inspection today, I got my business licence. I filed a DBA yesterday, and next is to insure and get bonded, I got five clients that are ready to work with me on their credit in exchange for a testimonial. I just wanted to say thank you to the whole Credit Repair Cloud Community. I have fully dedicated to work from home this year to generate revenue and beyond. Thank you. Gabrielle, that is awesome. I just want to say congratulations on this new journey. I'm so excited that you have your first clients lined up and just don't stop. Okay, keep going. And you will succeed and know that we are all rooting for you. And by we I don't just mean me and our team here at Credit Repair Cloud. No, I mean, our amazing community of credit heroes that has just past 26,000 members. And the whole point of our community is to inspire and to help each other up the mountain. And when we do that, there's nothing we can't accomplish together.  Okay, let's get into this. If you want to repair credit, the number one thing you'll need to learn how to do is dispute items on a credit report whether they are accurate or inaccurate. Now, many people get intimidated when I talk about the dispute process. Because even the word dispute it sounds like there's some kind of confrontation involved. Plus, when you start to think about the legal terms or processes that you might need to know it can get overwhelming really fast, but it's not overwhelming. It's actually very, very easy to see. I learned about this myself. I learned about it when my own credit got messed up by a bank error and that error caused me to almost lose my house and nearly go bankrupt. And back then, I was so broke, I couldn't afford to hire a credit repair company. So I set out to learn everything I could about credit repair. And I did, I studied, and I studied, and I repaired my own credit. And then I started helping family and friends. And along the way, I began to see how terrible the credit system was, and how it hurts people. And I wanted to help other people who were having the same trouble as me. So that's why I created my software, which is Credit Repair Cloud, and that now powers most of the credit repair businesses in America. So that's my story. And that's how I know about this stuff. So let's talk about the dispute process. Now the best way to remove inaccurate or unverifiable information from a credit report is with the dispute process, and the basics of disputing, they're actually really, really simple. So today, I'm going to break it down into five easy steps, and I've got them here on the board. And after you learn these five steps, you are going to be a pro at all basic disputing. And here's why this is important under the law, under the Fair Credit Reporting Act, we as consumers are given the right to dispute any items that are on our credit report that are inaccurate, incomplete or unverifiable or untimely. And if they can't be verified, they must be removed. And this is the basis of that law, and the basis of all credit repair. Removing inaccurate or unverifiable information on a credit report is one of the fastest ways to increase your credit score, and finally be able to get into that home or car that you were previously denied for 79% of Americans, that's nearly eight out of 10 people are walking around with errors on their credit reports. And those errors are costing them a lot of money every month in inflated interest rates. So learning how to dispute it can really change your life. And if you turn it into a business, you can start to change other people's lives.  So here's what you need to know. Here are the five steps. Step number one, get your credit reports, get a copy of your credit report from each of the three credit bureaus, Equifax, Experian, and TransUnion. And then take some time to carefully look over them to find inaccuracies, redundancies, or unverifiable information that you can dispute. Step number two, create your dispute letters. Now the first letter, it can be as simple as this. Dear credit bureau, I received a copy of my credit report, and I found the following items to be errors. And then you'll list each item that you're disputing and the reasons why. And be sure to include all supporting documentation if you have any, and include copies of your driver's licence and a utility bill, and then close the letter with this by the provisions of the Fair Credit Reporting Act. I demand that these items be investigated and removed from my report. It is my understanding that you will recheck these items with the creditor who has posted them, please remove any information that the creditor cannot verify. I understand that under 15 USC Section 1681. A, you must complete this investigation within 30 days of receipt of this letter. And then step three, send the letters as soon as possible. See the Fair Credit Reporting Act. It gives the credit bureaus 30 days to investigate a claim. And if you're doing this for a client, set a reminder on your calendar so you know when to follow up with the client to see if they have received a response so that you can act on it quickly. And step number four, collect the responses. See the credit bureaus, they are going to respond a few weeks later by US Mail and the response that they send, it will indicate that the items that you disputed were corrected or removed from the credit report or that the item was confirmed and will remain and step number five, follow up and be persistent. If a bureau has not removed the item from from your credit report. Next, you want to send a follow up letter, reiterating the dispute and the reasoning behind it. Now remember, you may have to dispute the same item several times. And if you do, this is not unusual. Now depending on their response, you may need to follow up with other types of letters to the credit bureaus, or even to the creditors themselves. Now, if you want a great resource, I have a book that I give away for free. It's called The Ultimate Guide to Creating a Credit Repair Business. You can buy it for $20 on Amazon, but I will actually give it to you for free, just follow my link in the comments. I also have podcast episodes about all the common things that people dispute. And I've recorded episodes on deleting bankruptcies charge offs, collections, student loans, inquiries, personal information, and basically everything you need to know about credit repair, or how to grow a credit repair business. If you want to learn something about credit repair, it's right here in my channel. Just remember, patience and persistence are what it takes to be successful at credit repair. And nobody knows that better than our credit heroes here at Credit Repair Cloud, our software powers 1000s of credit repair companies. And our customers have helped millions of people to clean their credit by improving over 10 million credit report items and collecting for them over $170 million in revenue. With the help of Credit Repair Cloud software, our credit heroes, they know how to dispute and they can do it fast. And if you want me to hold you by the hand, as you launch your very own credit repair business, then you got to join the next Credit Hero Challenge. You'll get live training and mentorship, you'll get certified in disputing and you'll learn the process that is created millionaires and it costs less than you'll spend to take your family to McDonald's for dinner tonight. We start the next challenge in just a couple days. So you want to click the link in the video description or go to creditherochallenge.com right now. And if you're finding value in my podcast, be sure to click below to subscribe so you don't miss any of the secrets that I share each week here on the Credit Repair Business Secrets podcast. And if you're feeling kind and want to help me out, leave a review, give me a thumbs up. This is a new podcast that can use all the help I can get. And be sure to leave a comment or ask a question because I read each and every one of them. And I will see you in the next episode. And until then be a credit hero and keep changing lives.  Want more credit repair business secrets. Then get a copy of my book The Ultimate Guide to starting a credit repair business. Get it free at reditrepaircloud.com/free book Inside this book, you'll find my top 35 secrets to removing items from credit reports and turning that into an amazing business that helps people change lives and makes you a great living in the process. Get it free at creditrepaircloud.com/free book

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