Q & A – Highly Important Questions People Ask About Credit Repair and How It Impacts Your Life
We’ve become more and more dependent upon credit. Since we depend upon a system which has an impact on more than 75% of the decisions we make, it’s imperative we have at least a basic understanding of how to repair, build and maintain A-1 credit.
Today, we’re going to go through a detailed question and answer session and you’ll get answers to some of the most common questions people have about credit repair and credit scores. Do you have credit problems, but you’re confused about where to get help, who to trust and what your first step should be? Well today, your in luck, because I’m giving away all the goodies.
Take time, read through the questions and answers about credit repair and if you have questions that aren’t covered, comment below and I’ll be sure to respond. You can message me if you’re credit question is more private and personal. I often receive personal messages from people who don’t want to publicly talk about there personal credit problems.
Let’s dive deep into some questions and get some, no holds barred answers.
Yes , credit repair is legal. Clearly stated in the Fair Credit Reporting Act, you have a right to have all inaccurate, outdated and unverifiable information removed from your credit report. It doesn’t matter if the account belongs to you and you couldn’t or didn’t pay it. Many people think that if they defaulted on the account it must stay on their credit, but that is not the case, the credit reporting agencies must remove or correct any information they cannot validate as being factual. This is not my opinion, it’s the law. Don’t let anyone advise you of anything different.
It would be out of place for me or anyone to tell you how long credit repair will take for your specific situation. Every single credit report is unique and so are the circumstances that surround them. There are variables to be considered when asking how long credit repair takes. Here are a few things that can determine the outcome of how long credit repair will take for you:
-The skill level of the company you hire to repair your credit
-The nature and the specific details of your case
-Your level of participation and compliance while going through credit repair
Statistically our clients have seen remarkable results
- 76% of there negative items removed in less than 5 months
- Credit scores up 127 points within 90 days
- The typical life cycle of our clients range between 3 – 6 months
I’ve had cases in which all negative items were removed from a clients credit report within 60 days, as well as cases in which credit scores were up 200 plus points in 30 days, but that is not typical and should not be considered the measuring stick for all cases.
Watch out for any credit repair company that promises to clean your credit in 30 days 60 days or anything similar.
It is NOT LEGAL for a credit repair company to “Guarantee” a specific outcome , it’s a violation of the Credit Repair Organizations Act. And It’s impossible to predict the final outcome of credit repair.
When taking into account how much money you’ll spend to repair your credit, be sure you match up how much it’s costing you to live with bad or mediocre credit in comparison to the money you’ll invest in hiring a reputable credit repair company.
Someone with low or average credit scores can easily spend thousands or hundreds of thousands of dollars in unnecessary interest payments when purchasing a home. That’s if they can even get approved for a loan . Unfortunately there are people who are content in just getting approved for a loan, they don’t consider the hidden costs. Every month I review an enormous amount of credit reports and see the astronomical costs people pay as a penalty for having low credit scores.
Having excellent credit will benefit you far beyond the point of being able to get a home, auto, student or business loan. Good to excellent credit (740 -850) will give you the opportunity to spend less money when you do get approved for a loan. You should want to keep more of your hard earned money in your pocket and not just freely hand it over to creditors.
Your credit scores are now being used to determine so many things that impact your life. Almost 47% of employers now check credit, when you rent an apartment your credit is looked and when you apply for insurance.
Can you afford not to take action? If you’re reading this and you have a credit score below 740, you should take action. You can do something or you can do nothing. I’m sure you’re aware of the consequences of doing nothing. Continued stress, frustration , and possible embarrassment when you apply for credit.
Take whichever action is most suitable for you, but don’t sit around and wait until you desperately need your credit and scramble for a last minute solution.
We offer 4 levels of service based on your needs and goals. Our standard “Silver Plan” is a low cost investment of $179 paid after the completion of your initial credit audit and the setup of your online file. You can also conveniently track your progress online 24/7 right from you private portal. Your monthly investment of $99 is paid after services are delivered. There are no long term commitments or contracts, so you can cancel anytime. Each plan is offered with a generous discount for couples, a money back guarantee and a lifetime warranty on all deleted items.
For more details on this plan and to see our other plans, visit our website www.leafcreditrepair.com.
No credit repair company can or should give you an upfront promise or guarantee that a negative account can be removed from your credit report. If someone gives you a verbal or written guarantee on or off line, they’re breaking the law. In 1996 , The Credit Repair Organizations Act was passed and outlawed credit repair organizations from promising you a specific outcome.
The Credit Repair Organizations Act was created to prevent credit repair organizations from all deceptive practices and protect consumers from fraudulent and unfair advertising practices. There are bad apples you need to stay away from, just like in every industry. But there are great companies and skilled professionals in the credit repair industry who make a positive impact in the lives of their clients.
Although a credit repair professional or organization is prohibited from making any upfront promise regarding the removal of negative information, there is actually no item that can’t be removed. Yes you heard me right. There is no negative information that can’t be removed from a credit report. If a negative account isn’t accurate, verifiable or reporting within the allowable timeframe., it can be legally removed from your credit. And over 79% of credit reports in this country have errors on their reports, which would fall into the category of being able to be legally removed.
Before making a decision hiring a credit repair company be sure to find out the deletion rate, the percentage of negative accounts removed when they dispute accounts. Don’t let price be the driving factor of what credit repair company you hire. If you were being sued and stood a chance of losing millions of dollars, would you the lowest priced attorney you could find?
John Ruskin wisely said
“The bitterness of low quality lingers long after the sweetness of low price fades away”. John goes on to further say, “It’s unwise to pay too much but it’s also wise to pay too little”.
When making a decision as important as your credit, which impacts so many areas of your life, don’t take shortcuts.
Logically you would think that paying old debt would help improve your credit . But most things about the credit reporting system which impacts some of the most important parts of our lives, makes no sense at all. Paying off old collection and judgment accounts actually don’t help your credit rating. Once negative credit items are on your credit report, they’ll stay there whether you pay them or not.
Whether or not you pay your negative accounts really is a personal decision. I am mot an advocate to pay off old accounts because I know that you actually don’t have to.
Paying off negative accounts will actually lower your credit score and the account will remain on your credit for 7 more years from the date you pay the account.
For more details on how to deal with collections, see my article, “why paying collection accounts will damage your credit score”. That article will help you better understand how to deal with old negative accounts on your credit report. http://leafcreditrepair.com/register/paying-off-collections
The short answer is yes , you can repair your own credit. But repairing your credit is not as easy as most articles you see online would have you believe. I’m sure your smart, think about it. If repairing credit was easy and all you needed to do was send out a few template dispute letters you found online, wouldn’t everyone have great credit?
I’m caught off guard when I see couple of credit repair professionals telling a mass number of consumers “you can repair your own credit”. But not letting the consumer know some very important information that will impact how effective their credit repair results will actually be. Many credit repair professionals that I hear promote DIY credit repair typically follow up with an “Oh by the way you can buy my DIY credit repair kit for $79.99. There is no problem with any of my colleagues offering a do it yourself kit, but please let people know, it’s not easy before they buy a kit. Within the next two or three months I’ll be releasing a downloadable do it yourself credit repair kit, but I will be fully transparent and disclose ,“It’s not easy”, “It takes time”.
If you’re going to repair your own credit, you should know:
– Credit repair takes time, if done correctly
– Credit repair takes patience, if you expect it to work
– Credit repair takes persistence, don’t expect immediate results
– Credit repair consists of laws like the FCRA, FDCPA, FCBA and TILA
You’ll need to have an understanding of those laws, because you’re going to need them if you plan on getting halfway descent results. It is important to know what order to dispute the accounts and what mistakes to avoid when repairing your credit. Check out my article “5 Credit Repair Mistakes People Make When Repairing Their Own Credit”. That article will help save you some time.
The question is you’ll need to ask yourself is, how valuable is your time, and do you have the aptitude and inclination to put in the necessary time and effort to repair your own credit.
A reputable credit repair professional that is in the business full time and has a proven track record.
Yes, you can repair credit yourself. Like most industries, though, it is far more effective to use a professional that specializes in credit repair. Someone that has a great deal of knowledge and experience repairing thousands of credit reports will know the ins and outs of how credit repair really works. They should be able to can get the job done quickly and effectively . But just as you might not choose to repair you own vehicle, prepare your own taxes, or defend yourself in court , you don’t have to tackle credit repair on your own.
This is a myth purposely spread by the credit reporting agencies through the media and government agencies in effort to intimidate you from disputing inaccurate, outdated, incomplete and unverifiable information on your credit report.
When negative information is deleted from your credit report, the reporting agencies can’t reinsert any account that was previously deleted unless there was new information found.
A creditor has 30 days to verify a dispute. If the creditor hasn’t responded to the credit reporting agency within he 30 day allowable timeframe, the credit reporting agency must delete the challenged item from your credit report. On occasion, the credit reporting agency will perform a soft delete and if the creditor responds a week or two after the 30 day time period. I’ve been in the credit repair industry for more than 7 years and had thousands of clients and I have seen less than 10 cases where an item was reinserted back onto a clients credit report after it was deleted.
On the rare occasion when the credit reporting agency reinserted an item, we successfully moved forward to have the same item permanently deleted.
To provide my clients the security of knowing that we stand by our work, we provide a Lifetime warranty on all deleted accounts.
There is a statute of limitations on negative items reporting to your credit. But , the law doesn’t call for a minimum length of time that a negative account must remain on your credit report. The credit reporting agencies can remove information well before the statute of limitations if they choose to. Creditors will often tell you that they can’t remove negative accounts from your credit report and say the credit bureaus simply won’t permit such action. But this isn’t true , I’ve often seen creditors make arrangements with the credit reporting agencies to have accounts removed in exchange for payments.
If you take no action and wait for items to fall of after the statute of limitations, that typically doesn’t happen. Creditors are notorious for selling your accounts to other creditors and the new debt collector will report the account as a new account although it might have already been on your credit report for 6 years. So don’t count on time being on your side and just waiting it out.
According to Experian, here is a brief list displayed on their website, which shows the most common types of information found on a credit report and when it will be deleted
- Late payments remain seven years from the original delinquency date. A single late payment is deleted at seven years. If there was a series of late payments (not paid at 30 days, or 60 days, or 90 days) and then brought current, the payments would be deleted seven years from the first one missed in the series. If the account was never brought current and charged off and placed for collection, the entire account will be deleted based on the date the account became late and was never again current. This is known as the original delinquency date.
- Collection accounts remain seven years from the original delinquency date of the original account. Collection accounts are treated as a continuation of the original debt and are deleted at the same time.
- Chapter 13 bankruptcy is deleted seven years from the filing date because at least a portion of the debt is repaid. Chapter 7 bankruptcy remains 10 years from the filing date because none of the debt is repaid.
- Civil judgments remain seven years from the filing debt. A civil judgment is essentially a debt you owe through the court.
- Unpaid tax liens remain 10 years from the filing date. Once paid, the lien will remain seven years from the paid date.
- Inquiries: remain two years from the inquiry date. However, the impact of inquiries on credit scores is minimal and decreases rapidly.
Experian says that you should take note that, except for tax liens, making a payment or any other activity on a negative account will not impact these rules.
Choosing a credit repair company is big deal and shouldn’t be taken lightly. Just like any industry there are always a few bad apples in the bunch . Not all credit repair companies are bad – There are some amazing credit repair professionals across the nation , that I admire and have learned a great deal from. Men and women who are experts at credit repair and enjoy making a big difference in the lives of their clients.
There are some great people that I know personally, who run ethical, successful , credit repair organizations, there are those who never acquired the proper education to legitimately help people in need of credit repair. Choosing a credit repair company without asking the proper questions can lead to a loss of time and money.
Before you hire a credit repair company here are a important questions you can ask.
Do You Offer a Money Back Guarantee or Other Warranty?
The company should have either a Money Back Guarantee or warranty for their clients, that’s clearly visible in their contract and visible on their website.
What is Your Audit and Setup Fee for New Clients?
A normal setup fee for a new client should be less than $500.
What is the Exact Cost for Your Service?
Price alone shouldn’t be a deciding factor when choosing a company, but an unusually high fee or low fee should be a warning sign.
How Can I Monitor The Progress Of My Credit Repair?
In today’s world of technology ,most credit repair companies offer an online monitoring system for their clients to track the progress of their credit. Calling in or making an appointment to travel to an office just to find out how things are going , could become inconvenient.
What Are Your Affiliations and Certifications?
Reputable credit repair companies should be in association with an organization like the National Association of Credit Service Organizations or the Ethical Credit Repair Alliance, Better Business Bureau or the local Chamber of Commerce.
What Do You Offer That I or Another Credit Repair Company Can’t Do?
Don’t feel uncomfortable asking this type of question. Your credit and the money you’re investing is worth the effort . If they are honest with their answers and it doesn’t come off like a vague sales pitch, that’s a good sign. If they go the route of claiming they have a special secret system but can’t explain the details of how it works, that’s not a good sign.
How Will You Repair My Credit and Improve My Score?
Ask them how they will go about fixing your credit. They should be transparent and explain their basic methodology for repairing credit. If the individual who you’re asking questions to, can’t provide straight definitive answers, then that should be a red flag.
Red flags to look out for include:
- Companies that have been in business less than 3 years
- Companies with numerous complaints with the BBB
- Companies without testimonials from a 3rd party(google , yelp , shopper approved, trust pilot, etc)
- Companies with a one man operation
- Companies that only allow payments in cash
If you’ve settled on a credit repair company that meets all of the requirements and they’ve answered all your questions and don’t have any red flags, you should be able to comfortably proceed with them. Before you pay anything, review the contract and verify that all terms you agreed to are in your contract. Any verbal agreements not included in the contract should be added before you sign.