Imagine that you are trying to get a loan but cannot due to an error in your data or that you have a problem with your bank account due to an error in your bank record. Those errors frequently recur, so there had to be a way to deal with this permanent problem. You should try to correct this mistake yourself, but a company can save effort and time and do this service on your behalf. This is exactly what is called a credit repair service. Here you can find the best credit repair companies.

 What is a Credit Repair service?

Credit repair is a paid service done by a third party which is a credit repair company. It aims to correct and fix inaccurate and negative information listed in your credit report that contains all your credit information and credit activity, such as loan history and credit account status. Your credit reports permit a financial service company such as Banks to access your credit history information to check if a loan applicant is eligible to take a new loan or not.

Correcting inaccurate and negative information improves your credit scores. If you have poor credit scores and credit problems, this service will help solve those problems in your credit report.

 The legal history of Credit Repair

When we think of this service, we will ask ourselves if the act of correcting errors and mistakes in our credit report is a legal action or not?

This service was legalized by the United States Congress in 1970 when the Fair Credit Reporting Act (FCRA) was issued. This act gives everyone the right to have a correct and accurate credit report, and it also includes the right to claim to correct and amend any error in this credit report. Hence, the credit repair service has spread, and many companies are seeking to afford this service perfectly. Those companies or organizations are called credit repair organizations, and they are quite common nowadays. Their business was totally legalized in 1996 when the Credit Repair Organization Act (CROA) clearly articulated how those companies and organizations shall work and what they shall do and not do to follow this Federal Act.

How does credit repair work?

If any errors or mistakes are found in your credit reports, the credit repair companies will not correct them directly. Instead, they will dispute to correct the false information. You can dispute yourself without the need for a third party. The credit repair company functions if there are errors or inaccurate information in the credit report, detects fraudulent credit transactions, and improves credit activity and score.

The credit company contacts the credit bureaus which are responsible for issuing credit reports, or they contact the reported companies that send your data to those bureaus (the three major credit bureaus are Equifax, Experian, and TransUnion). The reported companies might be the creditors, lenders, debt collectors, or financial companies like Banks. It contacts them upon your request to modify or delete errors. You have to wait 30 to 45 days until the creditor or debt collector verifies the information, but it must be deleted if the information isn’t modified. In the end, you receive a copy of the credit report to make sure that the information was removed.

Does credit repair service cost?

There are two common methods for making payments to credit repair companies. The first and most popular one between consumers is the pay-per-delete service. This method keeps customers contented since the credit repair company does not charge them until the service is well performed. This method keeps the credit repair companies apart from any violation of what is stipulated in the Law of the Credit Repair Organization Act (CROA).

The second method is the ordinary subscription service in which the company takes profit at the end of the month for the performed services during the month from your credit card. The cost varies between each credit repair company depending on your choice of the company. Those companies do their best to keep you as a loyal paying customer to them as much as possible.

Conclusion

In conclusion, a credit repair service would better help you fix and modify false information found in your credit report, which you can easily do. Still, people prefer such companies to do this process on their behalf to save effort and time. This article is considered a guide for you to be fully aware of the credit repair service, a brief history about it, how it works, and what it costs.