Having good credit is a financial achievement that most of us try to achieve. We know that this can help our chances of being approved for a wide range of financial products, but most of the time we have no idea how to get that much desired credit. Because of this, no wonder the credit repair industry exists.
Credit repair companies advocate that they can help improve your credit rating and thus give you financial opportunities that you would not have thought of before. This makes the credit recovery attractive. But the question everybody is asking and we will try to solve is: Does the credit recovery really work?
Rectify a credit breakdown
Whether it’s a new idea for you or you just need to be clear, let’s see what credit repair is in detail. There are two ways to go about straightening your credit: the Do-It-Yourself way or you can go to a professional and hire a credit repair company or a firm.
No matter which option you choose, you will need your credit report from the two Canadian credit reporting offices, Equifax and TransUnion. It is important to get the report from each of these offices since they have a different way of compiling your credit information.
The purpose of credit repair is to make sure your credit reports and ratings are representative of your financial life. Errors and bad information can greatly damage your overall financial health. Here are some steps you and your credit repair company will need to take.
The credit repair process
Step 1: Verification
As mentioned above, you must first have your credit report checked. This way, you will see if any errors have crept into your report and affect your rating. You can request a free copy of your report from Equifax or TransUnion.
Step 2: Challenge
If you have decided to go DIY, you will need to call your original creditor as well as the two credit check offices. First, you should contact your original creditor and challenge a notice of dispute regarding the item or entry that you believe to be an error.
You will probably need to call them back several times to make sure the credit bureaus and your creditor communicate with each other to resolve the error.
While it is possible to straighten your credit yourself, this step can be very demanding and frustrating. A reputable and experienced company in credit repair can save you time and energy.
Step 3: Change
If you or your credit repair company is successful in challenging an error on your credit report, you should see a change in your credit rating within 45 days. Obviously it depends on the type of error that has been fixed.
Situations Where a Credit Recovery May Apply
In reality, a credit repair will not apply to everyone. The credit recovery is there to help people with a very specific situation. If you have mismanaged your credit in the past and have a bad credit rating, you probably will not be able to see your credit adjusted. Here are 3 situations where your credit could be adjusted:
1. If there are really mistakes in your credit report
Since the main reason credit recovery exists is to correct errors in your credit report, only those with recognized errors will benefit. You may find errors in the entry of your personal information or in the credit information entered by your creditors.
2. If you can provide documents that prove an error
All information contained in your credit report should be verified. If incorrect information has not been changed, you can dispute it and if it can not be, credit bureaus may have to remove information from your report.
The same principle applies for information you want to delete. If you can not prove that it is incorrect information, you may not be able to delete it.
3. If your creditors agree to cooperate with a credit repair agency
One of the most frustrating things would be to have a creditor who does not want to cooperate with you. Some are willing to negotiate and help you while others are not. If you have problems with a creditor who does not want to cooperate, you may need to consider using a professional credit repair company.
If you are trying to improve your credit rating but none of the following examples fit your situation, there are many other ways to do it.
How to choose a credit repair company
Choosing a professional and experienced credit repair company can prove to be beneficial or a waste of money for your financial health. Here are some of the most important things your credit repair company should provide you:
- Your rights as a consumer. Your credit repair company should always provide you with this information to help you understand your rights as a consumer. If they do not agree to provide you with this information, do not sign a contract with them until you have discussed it.
- Enough time to explain your situation. In order for a credit repair company to help you turn around your credit, it must understand the problem and why you want to fix it.
- How they can help you A good credit repair company can explain in detail how they will help you correct and put your credit back in order.
Other ways to settle your credit?
Credit recovery is not the only way to improve this one. Pierre Loms has other options to offer to help you with your credit rating and to provide you with general financial support.