What Is Credit Restoration?

Credit Restoration

When you think about credit restoration, you may imagine a credit repair company removing derogatory items from your credit report, improving your score. However, it is important to know that this process can be complicated and it takes a lot of time to get things fixed. In addition, it is very difficult to find a credit restoration company that will not overcharge you. In fact, the Consumer Financial Protection Bureau (CFPB) has filed suits against a number of these companies for deceptive practices.

Credit Restoration involves disputing mistakes and errors on your credit report. The Fair Credit Reporting Act gives you the right to dispute any information that is inaccurate. The credit bureaus and creditors are required to investigate the disputed information and, if it cannot be verified, it must be removed from your report.

A good credit restoration company will work on your behalf to correct these errors and negotiate with creditors. They will also help you clean up your credit and build a strong, positive credit history. This can make it easier to obtain loans and qualify for mortgages in the future, as well as save you money on interest rates because you will pay lower fees.

What Is Credit Restoration?

One thing to keep in mind about credit restoration is that it does not remove accurate negative information from your report, like late payments or a bankruptcy. It can, however, remove unverifiable or outdated information that is lowering your score. This could include a debt that belongs to someone else or a missed payment that was actually paid on time. It can also include a incorrect account status, such as a closed or paid-in-full account that is still being reported as open, or a hard inquiry on your credit that you did not authorize.

Having accurate, up-to-date information on your credit report is the best way to improve your score. In addition, the longer your positive credit history is established, the higher your score will be. Therefore, it is very important to monitor your credit closely and address any errors promptly.

Unfortunately, there are many credit repair companies that do not provide the services they advertise. Some of them may even be breaking the law. For example, if a company promises to raise your credit score within a certain amount of time, they are likely violating federal laws. Other violations may include charging you unnecessary fees, such as a large initial fee and then monthly charges that add up over time.

While it is possible to hire a credit restoration company, you can do most of the work yourself for free. You can check your credit reports with each of the three major agencies, Equifax, Experian, and TransUnion, or use a free service like Credit Sesame to do it all for you. You can also sign up for a credit monitoring service and stay on top of your credit. This can help you avoid credit fraud and identity theft, as well as identify suspicious activity such as new accounts or inquiries that you did not authorize.