Is it possible to pay for your credit to be fixed?
Fix Your Credit for a fee, some for-profit businesses offer credit repair services. Credit repair services may include disputing any delinquencies in your credit reports and negotiating with debt collectors to get rid of negative marks. The FTC warns that credit repair scams can be widespread in the industry. If promises seem too good to be true, it is probably because they are. You could be charged with criminal offenses if you lie about credit applications or use a social safety number that isn’t yours.
You can repair your credit without paying for a credit repair company by improving your credit management and credit habits. Non-profit counseling services are also available for personalized guidance and resources.
What is the Credit Repair Organizations Act?
The Credit Repair Organizations Act federal law protects consumers and sets rules for “credit repair” organizations. Credit repair companies are prohibited from making false or misleading claims about you, your creditworthiness or themselves, nor charging you for their services. Contracts for credit repair services must be written and you have the right to cancel it without penalty within three business days.
Repair
There are many methods to improve credit but not all are equal. Start by reviewing your credit report and identifying the factors that are causing your credit score to drop. Then, work your way up. Many people have multiple areas that need improvement, which means prioritization is necessary.
Bruce McClary is vice president of communications at National Foundation for Credit Counseling. “One thing you need to think about, what will have the greatest impact.” To improve your score, you will want to prioritise establishing a consistent pattern for on-time payments.
Credit Repair After the COVID-19 Pandemic
The pandemic saw many lenders and credit card issuers offering special forbearance and other relief programs not typically available to consumers. While they were only temporary programs in most cases, there are still things you can do if you are working to repair your credit following the pandemic.
For starters, all consumers are entitled to free weekly credit reports through April 2022 – instead of the one free report per year during normal times. Checking your credit report regularly will alert you to any fraudulent or inaccurate information – both of which can hold you back in your efforts to repair your credit if left untended.
If you find errors or mistakes on your credit report, notify the credit reporting agencies – Equifax, Experian, and TransUnion – directly to address them. There is a defined process for disputing errors on your credit reports.
The Federal Trade Commission also recommends contacting companies you owe money to directly if you are facing financial challenges that complicate your efforts to improve your credit. Though they may have no obligation to help, it can’t hurt to ask for help based on your circumstances. Companies might allow you to delay payments or use a payment plan, or potentially give you a temporary forbearance plan.
Improving or repairing your credit can be hard work, and there unfortunately is not quick or easy fix. Resist the temptation to enlist the help of a paid credit repair company, since they come with no guarantee of results, and in some cases might even make things worse. On the other hand, working with a nonprofit credit counseling service might be a good option, though this too is unlikely to be a quick or simple fix.
