Do you know the legal & financial repercussion of a poorly done “job” by a credit repair agency? If you’re doing a detailed credit cleanup service, whether outsource or self-fix, it’s imperative to adopt proper financial controls and research on highly proven debt mechanisms – mitigating risk of getting involved with legal implications; a fine, a jail term, or both. A credit fix solution should be helping you in steering out of financial distress, not the other way round!
Here is a comprehensive list of the Do’s and Don’ts of credit repair.
Dos of credit repair
Credit report, highest probability of repairing bad credit score, is your personalized set of financial information. Your report derives from combined efforts, creditors, credit reporting agencies (bureaus), debt collectors, and other data analytics corporations. Unless you accede to incoming negative data influx, fixing of irrelevant claim or error is recommended.
Below are the five do’s of credit repair:
1. Research on claimant’s history: You’ve to perform an in-depth study on the reporting pattern from foreign lender, local creditor, financial institution, credit card company, or your personal consumption. Financial education helps in improving credit knowledge and imparting the ability to understand how to read a credit report – fetching relevancy to credit repair while landing you the appropriate skillset to overcome future financial decision-making process.
Management of financial education is highly sophisticated. You’ll undergo an arduous task in learning about your creditor’s reporting history, credit clean up, detailed bureau check, debt collection ideology, applied financial concept, or pressure from a myriad of lawyer’s legal lawsuit – making you financially impaired in doing credit repair. Persistent research in credit fix or conduct trial and error is a good way of detecting potential claimant’s incorrect reporting.
Data: Personally, calling up your banker or investing time to investigate loss of money (unknown reason) may help in recovering certain key information. You’ve to be patient in self-education as managing credit repair does not happen overnight – financial institution emphasizes on time and effort to understand consumer’s behavior.
2. Listing of error: You’ll have to invest some time in identifying mistakes lodged by creditor, financial institution, credit bureau, or debt collection agency. There is no “perfect” credit report. After conducting an intensive research, basically on the foundation of claim and dispute management, it’s imperative to start listing out any error or discrepancy found – delayed response is highly perilous as creditors do not like to monitor negative reporting status.
Management of listing of errors is a tedious task. A credit clean up is expected in removal of tax lien, restoration of credit, paid debt, obsolete information or improvement of credit score – ensuring your personal report is the latest version, ready to take on new records. Persistent retrieval of reporting error or mistake is a good way of doing individual credit repair.
Report: You can either fix the error(s) by filing a legal dispute or outsource to a credit repair company, both methods do work where the former requires time and effort while the latter leverages on experience and connections to rebuild credit.
3. Filing of dispute: You’ve to be financially prepared to receive ambiguity from local credit bureau, creditor’s response, third-party ombudsman service, or lawyer’s inquiry – not addressing the question directly or responsive in handling the problem. Dispute resolution, one of the major difficulties in credit repair, is a skill that you need to adopt for future credit fix. There is no immediate one-size-fits-all solution for each individual.
Management of dispute filing is on a case-by-case basis. Credit reporting agencies allocated time in dispute management, information retrieval, settlement of Court case, or local credit repair contact – acting as a financial intermediary to your personal dispute resolution process. Persistent communication on reported mistake or information control can ensure a healthy gearing ratio.
File: You’ll be responsible for the actions taken in proper remedy toward creditor. In return, an assignee will handle your dispute in an amicable manner and the credit bureau has the final decision in your credit dispute outcome.
4. Seeking another credit repair consultant: You may unknowingly file a list of objects by mistake to relevant credit reporting company, creditor, credit repair agency, or other debt collector department – prolonging the entire dispute case unintentionally. A cash drag in workflow process may significantly impact your credit score when financial institution like bank or micro-finance lender made an enquiry on your financial status.
Management of credit repair service is obligatory. Assuming you’re doing credit restoration on your own, it’s important to ask an ex-bankrupt friend, relative performing remedy on bad debt, or any consultant working as a credit repair specialist – lowering your risk of lodging falsified information, thereby posing threats to the overall financial score. Private consultation does help in removal of unwanted objects in a more accurate manner.
Consultant: You’ve to seek a credit repair nearby your neighborhood. In doing so, you exchange some cash for a peace of mind and proper credit rectification – a win-win orientation for both parties, no?
5. Credit shield protection: You’re exposed to anonymous association(s) like foreign financial intermediary, debt collection company, third-party vendor, data analytic business, fast credit repair company, or miscellaneous partner – Personal credit file being reviewed by trusted agencies but unwillingly sold out to “black” market for data collection purpose.
Management of credit shield protection is necessary. In order to prevent identity theft, unapproved credit usage, sudden bankruptcy declaration, loss of personal credit score, offensive attack from claimant, applying for credit guard insurance is utmost imperative – reducing potential credit fraud occurrence as well as demonstrating proactive attitude in financial risk management.
Protection: You’ll be in-charge of buying an insurance on credit protection (not expensive to begin with). Yes, there is such a financial mechanism in transferring your credit risk over to the insurer, who will then take on any fraudulent scheme and critical threat.
Dons of credit repair
Credit repair, one of the most difficult restoration idea, is a double-edged sword for debtors. Your diligent effort and cost of credit clean-up might not land you up in an ideal situation. Instead, legal repercussion could arise from financial institution, a local bank, debt collector, professional debt recovery firm, or scheming fraudster.
Below are the five don’ts of credit repair:
1. Credit repair plagiarism: Sources, whether offline examples or online books, are often abused by fraudulent creditors. You may perform an informational search online for tips & tricks of credit repair in 2018, but not applied knowledge to fix bad debt. You’ve to be wary on the overpromising content from writers as the primary focus is to generate traffic instead of providing the highest quality – sending incorrect signals over to your creditors.
Management of wrong credit repair requires some skills. Fixing negative credit report is already a chore, what more dealing with invalid information to credit bureaus (who ultimately decide whether to lend a helping hand or not). It’s important that you consult a professional credit repair business when the matter comes to filing for credit disputes – conveyance of the right message over to the right parties.
Specialist: Sky blue or Lexington Law credit repair company is available to provide personalized client service, assigning one agent to handle your case. A dedicated account manager induces close communication between you and credit bureaus (plus financial advice in the entire credit restoration phases).
2. Lack of information control: Being transparent about your credit score or financial condition might not be a good choice. You’ve to personally reveal high-quality information over to the recipients. The primary purpose is to fix bad credit portfolio mix and not the other way around – revealing too much details may raise “red flag” markers by credit reporting agencies – thinking too good to be true.
Management of oversupply of credit information is highly specialized. As you may inadvertently verify negative objects, usually found in a credit report, you tend to get panicky when the agent reaffirmed such a claim is valid. There is a potential legal implication and your credit file may be sent for further monitoring – wastage of resource for either party while being detrimental to financial health.
Information: You’ve to practice – rehearse a few times – before calling up your selected credit bureau (who has up to 60-days to respond to queries). Rehearsing do fetch some benefits in questions and answers while gaining confidence in speaking upfront.
3. Incorrect way of dealing: More often than not, a simple phone call is insufficient when dealing with the CRA, creditor, debt collector, or credit repair specialist. You’re not in control over certain decisions – behind the scenes – hence written communication especially e-mail writing is mandatory. The current conversation albeit being track, cannot be used even if Court proceedings requested for them. It’s imperative to condone such laziness and start penning down validated information.
Management of key communications will help you in future credit fixes. Proper communication channel, accompanied with legal evidences as black-and-white back-up, financially helps in eliminating credit discrepancies when problems arise in tracking information over a period of 6 months to one year. A reveal of email records shall boost creditor’s confidence in connecting with you while improving financial discipline in managing credit-related matters.
Communication: You’ve to plan for several modes of communication. It’s possible to consider the following platform; email writing, contact form listing, direct phone calling (recorded line), proxy sending, letter writing or appointment booking – traditional method(s) seemed to be the best form of communication.
4. Wrong focus on raising credit score: You’ll like to increase your financial credibility in the eyes of creditor(s). However, improving credit score is not the ultimate focus in convincing credit repair company, lender, business associate, insurance agency, or financial service provider – probability of signalling impatience is high. Compliance department in banks do a thorough credit review while judging based on their past experience (generally negative by nature).
Management of credit repair information is crucial, however. You’re held accountable in doing the right thing when it comes to planning for a complete credit revamp. In doing so, get some financial assistance from trusted sources, a close friend, another relative, a credit bureau agent, a personal banker, or a professional credit repair consultant – improving the chance of credit clean up service.
Focus: You’re empowered with proper financial knowledge and control now. Go ahead and invest some efforts to manage your personal credit score portfolio. It’s dire to utilize a prestigious company when dealing with creditors.
5. Signing for guaranteed removal of negative information: Firstly, there is no “guarantee” of removal of tax lien, bad debt claim, credit report for $99, or whatsoever. No credit repair company shall promise you on the term “guaranteed” and anyone doing so may not be running a legitimate business – franchise or business is under strict financial license regulation.
Management of credit repair must be independent. If you’re in search of a local credit repair company, do a comprehensive check on the following list:
- Company registration (Date of incorporation, company rubber stamp etc.)
- Business license or Franchisee license
- Credit repair portfolio mix
- Background & History
- Reputation in the marketplace
- Cost price (affordable is good, expensive depicts quality but cheap has perils)
- Location (physical location available especially on Google maps)
Decision: You’ve the ability to make the final decision on which company(ies) to engage. No one organization can “force” you to sign up for promotional package that has 30 day or 90 day credit repair, or $99 cheap credit repair, or whatsoever ongoing campaign – you’ve to be responsible for undergoing a proper legal agreement.
Consumer support list for credit repair
Are you still confused on the dos and dons of credit repair? Additional items for consideration included:
- Avoid bribery – credit dispute has to be authentic
- Ignore legalistic term – communicate in a clear term
- Don’t close account – existing current account is useful
- No signature before agreement – debt collector’s favorite idea
- Positive information – furnish in a transparent manner
- Frequency – remain contactable at all times
- Keep receipt – be sure to keep track of financial movement
- Report identity theft – always be alert on identity thefts
- Avoid lawyer letter – don’t sue without warning
- Patience – financial discipline doesn’t occur overnight
- Payment – pay after contract ended
There are multiple variations in credit repair. Listing down each and every occurrence is impossible, due to unique nature of borrower’s history. If you’re serious in getting the “job” done, proceed to observe the above 5 dos of credit repair but avoid the other 5 dons of credit repair.
**Tip: Learn more about the do’s and don’ts of credit card here, hot deals, fraud prevention, or simply safeguarding from identity theft.
Quote of the Day: “Success is at hand – KIG Hall [2013-2018]”
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» What is Credit Score: Boost your current credit scores!
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This article was originally published on February 05, 2014. It has since been updated.