Ask 10 people to define credit repair and you will probably get 10 different answers. Even amongst financial experts, there are disagreements about what credit repair is.

So exactly what is credit repair?

People on the far end of the spectrum will tell you that credit repair is a myth. That it is snake oil peddled by con-artists trying to separate you from your money. They feel that a bad credit rating is something you have earned and will have to endure without recourse. According to them, the only way you can “repair” your credit is to wait for the negative items on your credit reports to naturally fall off.

Fortunately for people with bad credit, there is much more to the credit repair story than these naysayers want to believe. But this is not to say their advice is completely invalid. If your credit score is suffering, your credit will improve as the late payments, collections accounts, or liens naturally drop off your reports. Providing that new negative items are not added to your credit reports, time is absolutely an ally of the credit repair process.

Sitting and waiting, however, is not credit repair. There is much more you can do.

Those who have done their research on the credit reporting system and your rights as a consumer can tell you that repairing your credit can be a much more proactive activity than credit repair critics would have you believe. There are a number of things you can do right now to try removing the negative information in your credit reports.

Based on your rights under a variety of consumer protection statutes including the Fair Credit Reporting Act, you have the right to dispute any items in your credit reports that you feel are inaccurate. And exactly what does inaccurate mean in this case? When dealing with your credit reports, inaccurate credit listings can include any items you feel are patently wrong as well as items that you feel are misleading, biased, incomplete, or unverifiable. As you can see, you have significant leeway when it comes to determining which items you believe should be listed on your credit reports.

The process of removing bad credit from your credit reports is a more accurate definition of credit repair, however, there is still more to be done. When most people think about repairing their credit, they think of increasing their credit score. In most cases, deleting bad credit will get you closer to this goal, but it might not get you all the way. Improving your credit score may be more than just getting rid of the bad, you may also need to add some of the good.

A more complete definition of credit repair includes not only the removal of bad credit, but the addition of good credit and the changes in lifestyle that will help you maintain your credit and continue working towards an 800 credit score.

Finally, the first step in achieving your credit goals may not have anything to do with the items currently on your credit reports. If you are falling behind in payments or facing bankruptcy, removing negative items from your credit reports is at best a temporary fix. You will need to take control of your finances through better budgeting, debt consolidation, or maybe with the help of professional counseling. It is only after you have stopped adding bad credit to your credit reports that you will be able to start improving them.

Because of this, you could extend the definition of credit repair to a much broader concept that also includes debt management. Credit repair could be thought of as a holistic effort that ultimately leads you to high credit worthiness and financial stability.

Good credit score is necessary if we want to live normal lives. Lots of people make mistake of not paying enough attention to their credit rating even though without good credit many of the everyday things like renting a car, apartment or having a credit card would be unavailable to us.

Each time you do not pay your creditor on time it will be reported to the credit bureau and your credit score will be adjusted accordingly. And in case that it happens often or even you allow your loans to go default, you are going to find yourself in a situation needing credit repair.

Why will you need credit repair? Well with poor credit score you might forget about getting a credit card or a loan of any kind. Well not probably of any kind, but you will be forced to take a loan with a much higher interest rate and because of that your monthly payments will be even harder to make on time.

So how to begin with repairing your credit? You have a number of options here, you can either try a do it yourself credit repair or you can hire a credit repair company to help you.

Your initial research will lead you to a lot of companies that advertise themselves on the web and in newspaper. Most of them use a very aggressive marketing techniques and offer many promises they can not keep.

Be very careful of this promises because simply put there is no fast credit repair. Even if your credit is damaged only by a few incorrect items in your credit report it will take months before those items are cleared.

Also many of these ads are just scams, with all the identity theft around you must think at least twice before giving your sensitive, private information to a company you have never before heard for.

When it comes to do it your self credit repair you should know that whatever a credit repair company can do for you, you can do yourself. What that means is do not listen if somebody promises you a credit repair in a few weeks, credit bureaus work for themselves and are not associated with credit repair companies in any way.

Nobody can erase bad items from your credit report if those items are correct. In most cases a credit repair company will persuade you to challenge all of the negative items on your report.

Sometimes they might even propose engaging in illegal activities, do not take this route, even if it does not get you in a trouble with a law any credit improvement will be only temporary.

Much better way for this is do it yourself credit repair, go online and search for information. The best places for information are well trusted, established credit repair companies and law offices and naturally the government sites.

Step 1 – Get the copy of your credit report from a reputable provider.

Step 2 – Examine it thoroughly for any mistakes, if you find any try to dispute them. Be sure to dispute ONLY the incorrect items.

Step 3 – If you can not find any errors you are in deep credit trouble and will have to go through the complete repair process like debt consolidation and maybe even bankruptcy.

One simple step is to apply for a secure credit card. Just be sure to pay the bills for it regularly and by doing this you will start a slow but steady process of repairing your credit score.

This process will require a large amount of patience and determination from you. But by improving financial responsibility you are going to be in a position to payback your debts on time. By doing so you are going to prove to them that you can be trusted with a credit.

Once again keep in mind that credit repair will take both time and patience, but by undergoing do it yourself credit repair you will profit in the long run.

Questionable Credit Repair Practices

A small sub-set of the credit repair industry has been operating in a gray area of the law by selling authorized user accounts to consumers. Many credit repair customers have been willing to pay significant amounts of money for these accounts, and the credit score benefit that comes with them. According to the Fair Isaac July 31, 2008 press release, those days are officially over.

A Brief History

The FICO credit scoring model considers, among other things, the payment history of your credit cards as an indicator of your credit worthiness. Until now, FICO also applied the payment history of authorized user accounts in their calculation of the score of the authorized user – an interesting point as these accounts reflect the credit worthiness of the primary card holder, rather than the authorized user.

The Birth of Credit Repair Card Sales

A number of credit repair companies picked up on this loophole and began to sell authorized card memberships to people wanting a quick score boost. Soon lenders caught on and decided to fight back; justifiably so, as these accounts artificially skewed the credit scores of borrowers, making good credit decisions unreliable.

The End is in Sight

Fair Isaac Corp. has now taken steps to preserve the integrity of the FICO score by eliminating the score benefit of authorized user accounts sold by so-called credit repair companies that chose to operate in this questionable market. If you have considered buying authorized user accounts from one of these credit repair operations to get a quick bump in your credit score, forget it.

The End of the Credit Repair Gray Market

The new, updated, FICO 08 release includes a fancy sorting algorithm which reportedly will allow legitimate authorized card holders, such as spouses, to continue to receive the score benefit, while effectively blocking cards that were sold in the credit repair gray market. Spouses are clearly safe, and based on the language of the July 31, 2008 press release, so, we believe, are child accounts.

How Does the Magic Work?

If I had to guess, I’d say that Fair Isaac tests for a relationship between the primary card holder and the member user. I’d also guess that they are testing for the number of member users per primary account. In other words, primary accounts that have more than one or two authorized users will be blocked for sure. This in itself would eliminate the majority of the gray market accounts because most of these accounts were sold multiple times.

Make Your Credit Repair Plans

Fair Isaac’s new approach to the authorized user account problem is very even-handed and should provide comfort to spouse and child card holders, as they should be able to continue to enjoy the score benefit of their accounts. But if you are making a credit repair effort and have purchased authorized user cards and are counting on them to maintain your score, it’s time to make other plans.

Finding the Right Solution

Ethical credit repair is also the most effective. Truly successful credit repair is about a genuine reshaping of your credit. You might have been able to artificially increase your credit score by purchasing an authorized card membership, but this was never an effective long term solution.

Credit Repair Done Right

If you are in a credit repair program and want to improve your credit scores, there is an effective and reliable way to do so. Build your own credit! If your credit scores are below the level that will allow you to get unsecured credit cards, get secured cards. Secured cards are cost effective, the accounts are yours, and before long you will be enjoying improved credit scores. That’s the right approach to credit repair.

Copyright © 2008 James W. Kemish. All Content. All Rights Reserved.

Setting Priorities

What do you want from life? You can achieve your goals. Success is within your reach. There are just two requirements. First, you must be clear about your goals. Second, you must work towards your goals – everyday. Clarity is essential. If you really want something, your actions must be consistent with your goals. If you want a promotion at work, for example, you might choose to sign up for a night class that will help your career. If you want to get into top physical condition you could start an exercise routine today. Every choice you make today will determine the direction your life will take tomorrow.

Perfect Credit and Financial Freedom

Would you like to have perfect credit? Would you like to say goodbye to financial stress once and for all? I assure you that your goal is within reach, and it is closer than you think. To achieve perfect credit you must be clear about what you want, and you must be willing to work towards your goal – starting now. Clarity of intent means that you are willing to put your goal above other desires. In all endeavors temptations will appear to challenge your resolve; it’s a law of nature, there are always opposing forces. But if you consciously renew your focus every day you will prevail. The first step towards perfect credit is an understanding of the intricacies credit repair. There is more than meets the eye.

The Need for Credit Repair

Credit repair is the essential first step towards perfect credit. Credit repair is incredibly powerful and effective if done right. Many people ignore their credit report after a period of credit damaging financial stress. This is understandable; it can be very uncomfortable to examine derogatory information on your credit report. But there is nothing more important. And as hard as it might be to get started on a credit repair effort, the relief that you will feel once you have taken the first step is fantastic.

The Truth About Credit Repair

Over half of all credit reports contain errors that are serious enough to cause consumers to pay premium interest rates on their loans, or even to be denied for financing. These errors are the result of deficiencies in the checks and balances built into the credit reporting system. You may be surprised to know that there is little that can be done to rectify these deficiencies. There are three credit bureaus. Each bureau manages data files on over two hundred million Americans. Each data file is updated constantly by creditors, collectors, and public record service bureaus. Billions of updates are processed daily. The system is designed to be as efficient as possible given existing constraints, which happen to include self-defined financial limitations of the credit bureaus.

Insult to Injury

In addition to the overall error statistics which are supported by many different independent studies, including a Government Accounting Office “study of studies”, there is another unfortunate and less publicized fact which has made credit repair an essential defensive process for so many people; those with legitimate credit issues are considerably more likely to have errors on their reports than others. The reason is simple. Once an account falls behind or is charged off, it is out of the mainstream and is handled on an exception basis. And even worse, once an account goes to collection it often replicates itself as it is passed from collector to collector, even though it is not legal for a collector to continue to report once they no longer own the debt. It is unfortunate, but the system often generates credit reporting errors for those people who can afford them the least. But it is not all bad news. Once you understand your rights it is not difficult to clear up your credit report and put yourself on the path back to great credit.

Calling a Credit Repair Professional

Effective credit repair requires a working knowledge of the laws that govern the credit bureaus. You cannot get the results you need by simply disputing obvious derogatory items. Most credit reporting errors are compliance errors and may be overlooked by someone that is not trained. It is also important to know how the FICO scoring model operates; many people start a credit repair effort only to discover that their credit scores are falling month after month. Everything on your report has an impact on your credit scores. Success in credit repair will come from a careful balance of actions. If you are going to attempt your own credit repair take the time to read a good book on the subject before you start. If you are a busy person and prefer to turn the job over someone else, you should hire a competent credit repair professional. They will insure that everything possible is done to clean up your credit, optimize your credit scores, and help you reach your goal of perfect credit. Good luck!

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.

 

Credit repair services tend to make grand statements about credit repair. They give the impression that hiring the company will fix all of your credit problems.

Is this true? Unfortunately no, it’s not. There are fraudulent credit repair companies that prey on people with bad credit.

It is said that fraudulent credit repair services have taken over 50 million dollars from the consumers. This is a result of people with bad credit being frustrated with paying high fees and interest. 

What about guarantees? When a credit repair service makes a guarantee you should use extreme caution. This company is probably a phony and only interested in collecting money from you, not actually repairing your credit.

However there are some credit repair companies that can be trusted. They will fight to repair your credit and are typically more effective than an individual.

This is because legit credit repair services are are familiar with the credit bureaus. The bureaus try to avoid conducting investigations into disputed listings.

Credit bureaus rarely investigate dispute requests because it costs the bureaus money. It also goes against the goal of the credit bureaus. This is to provide lenders with a measurable value on the likelihood of the individual repaying on the credit line.

When shopping credit repair services look for warranties or refunds, instead of guarantees. Also do your homework and see what is being said about the services by old clients.

If you are fed up paying high interest for a mistake you made in the past, then you should repair your credit. Good credit repair services can make the credit bureaus investigate disputes on your behalf. 

To learn more about credit repair or hiring a professional service visit us. If you are interested in do it yourself credit repair you can access a free credit repair letter here.