Should you fix your credit score by yourself? This is a dilemma for many borrowers who feel that their status is unfair. Unfortunately, reporting errors are quite common.
On average, one in five Americans suffers from the consequences of mistakes made by Transunion, Equifax, or Experian. Thanks to The Fair Credit Reporting act, you have a right to demand corrections. So how should you go about it?
Professional services offer convenient delegation. As you can see from the Lexington Law review, a team of qualified experts can do everything for you: gather your information, find the mistakes and dispute them.
The average cost of these services is $79 — $129 per month. At the same time, every citizen may arrange disputes without assistance. Let’s look at the pros and cons of each approach.
By law, every credit bureau must provide only verifiable and substantiated information. Mistakes on credit reports range from misspellings to outright false events. Even your starting credit score at the age of 18 may be wrong! Consumers may notice accounts that do not belong to them, incorrect amounts, or events that never happened, including bankruptcies and evictions.
Most negative items stay on your report for seven years. With time, their influence on the score fades, but the consequences may still be drastic. A chapter 7 bankruptcy is the most long-lived derogatory — it tarnishes your score for a decade. When lenders see a low rating, they interpret this as a red flag, a sign of unreliability or insolvency. Thus, scores must be repaired as soon as possible.
Repair is not an overnight process. It begins with a painstaking analysis of reports and collection of supporting evidence. Then, you need to deal with formal correspondence — dispute letters to the bureaus involved. Borrowers should be knowledgeable about consumer credit laws and the rules of written communication.
Where to Get the Data
Scores are easy to check through My FICO or mobile apps, but what about the reports that define them? Begin by obtaining them from the official source. Only one website is authorized to provide these documents — www.annualcreditreport.com. Before the pandemic, a user was entitled to three reports (one per bureau) once a year. Now, until April 20, 2022, you may download the files weekly. This makes monitoring one’s score much easier.
How to Analyze the Information
Different aspects of your borrowing history have a different impact on the score. Detailed information about the most common models — FICO and VantageScore — is easy to find. Both rely on a scale from 300 to 850 and look at a similar combination of factors, just in a different order. Generally, your history of payments is the most significant element, which defines 35% of FICO and 40% of VantageScore.
This means missed or late payments on the reports are the most damaging to your status. They stay on the records for seven years. In the FICO system, the other four elements have the following impact: total debt and credit utilization (30%), age of history (15%), new accounts (10%), credit mix (10%).
If there are multiple errors, prioritize them according to the damage. If the report mentions accounts you did not register, you may be a victim of identity theft.
Investigate and Gather Evidence
Unfortunately for consumers, credit bureaus require proof. Collecting it is the borrowers’ responsibility. Suitable evidence includes bank statements and any other official documents from your bank.
Once enough evidence is collected, you may draft and send a dispute letter to the bureau or bureaus that made the mistakes. The Consumer Financial Protection Bureau offers a template. Send the letter by certified mail with a return receipt requested. The mailing method is important, as you need hard evidence of the exchange.
After receiving your letter, the agency will conduct a formal internal investigation, which may last for 30 or 45 days. Afterward, it will provide an official response. The institution may reject the changes, accept them or ask for additional information. As you can see, the sufficiency of the evidence is crucial to avoid redisputes. If you do everything right, the bureau will amend your report and mail a free copy of it to you.
Professional Services: Convenience and Speed
As you can see, fixing your own score is a daunting task. In case of a couple of reporting flaws, you may achieve the result in just over a month. However, complicated cases may linger for six months or even longer. With professional repair, you do not have to scrutinize the records, search for documents or send letters. Instead, the experts do everything for you while you monitor the progress through an app or a web portal.
The company will collect your information, study it and find any errors that may be disputed. It will then liaise with your lenders to establish the truth and gather supporting evidence. Finally, the team will send convincing dispute letters to ensure the best results. Reliable services help consumers avoid redisputes and boost their scores as soon as possible.
How to Choose a Company
This is a highly competitive industry, and consumers should double-check the background of their potential providers. Collect information from multiple sources — BBB, Consumer Affairs, TrustPilot, etc. The Better Business Bureau site is particularly useful, as it shows the number of complaints over the past three years. In addition, you can see how responsive every company is to criticism. Finally, if any lawsuits have been filed against the provider, the website will display an alert.
Choose a provider with a money-back guarantee. Credit repair is not a science, but you may be entitled to a refund if the company fails to make any changes to your records. Commonly, the policy covers the first 90 days of service, and a single deletion voids it. If no information is removed, you should get your money back. Sky Blue Credit Repair has an unparalleled policy, as it is unconditional.
Make Your Own Decision
Repairing a score on your own is a feasible but demanding task. By delegating to credit experts, you will save time. Professionals will collect convincing evidence to deliver fast results. You will be charged for their services monthly, as long as you use them. Aside from fixing your score, the company may offer a wide range of extra services, such as identity theft protection, TransUnion alerts, budgeting apps, etc.