Legitimate credit repair companies can help you improve your credit rating by ensuring that inaccurate information is removed from your credit reports. However, they can't do anything for you that you can't do for yourself if you're willing to put in the time and effort. The most common way credit repair companies work is to challenge all the negative elements that appear in their report, whether they are accurate or not. This random dispute method can produce positive results temporarily, as the credit bureau has 30 days to investigate.
During this period, the items in question will not be included in a credit rating and a notice will appear below each disputed item. If the creditor does not respond with proof that the item is correct, the credit bureau will withdraw it. Typically, these companies offer to review your credit reports and address any negative elements they can with credit reporting agencies on your behalf. In some cases, a credit repair company may even connect you with lawyers who can take legal action against creditors or debt collectors whose reporting or collection practices violate the law.
That said, even if you know that debt mismanagement is the main reason for your poor credit scores, it's worth checking your credit reports to make sure everything is correct. It's important to note that there's no set time frame for credit repair, but credit reporting laws give you a good idea of how long you'll have to wait to see results. It shouldn't cost you anything unless you have to pay off your debts, which you'll eventually have to do even if you use a credit repair service. In some cases, a credit repair service may ask you to request an Employer Identification Number (EIN) from the Internal Revenue Service, which has the same number of digits as a social security number.
This allows you to create a completely new credit history. Reputable credit repair companies often offer a free consultation to help you determine if their services will actually help you (and which ones you would benefit from). Many credit repair companies charge a down payment and then bill late payments (which are billed after services are provided) for monthly services. Repairing and rebuilding your credit is a long journey, whether you're doing it alone or enlisting the help of professional services.
It's important to remember that if the information the credit repair service is disputing is correct, they will report it again the next time they send data to the offices. Credit repair services can't work magic and they can't do anything you can't do yourself. Trusting a reputable credit repair company to manage the dispute process for you can take time, but at least you can be sure that the task is being performed by a professional. It seems to be a somewhat common belief that credit repair companies will help you defend yourself against debt collectors or negotiate payments with lenders. However, this isn't something they can do for you - it's something that only you can do.