How To Compare Credit Repair Companies
There are several factors to compare as you shop around for the right credit repair services, including:
- Services offered: Review which services each credit repair company offers. For instance, some might offer credit repair and credit monitoring, while others offer additional services like debt management plans or identity theft protection.
- Cost: Compare the cost of services, including both monthly and first work fees. Look into any discounts available to help lower the cost of services.
- Number of monthly disputes: Certain credit repair companies may offer unlimited disputes, while others provide a specific number of disputes per month. Consider your needs and the number of disputes offered as you research companies.
- : Look at which credit bureaus each company works with. Its a good idea to choose a company that works with all three major bureaus if you need items removed from your Equifax, Experian, and TransUnion reports .
- Free credit consultation: Many credit repair services offer free credit consultations for new customers. These consultations can provide helpful guidance and insight into the services offered and what you should reasonably expect.
- Guarantees: Certain companies offer money-back guarantees for a set timeframe, often 30, 60, or 90 days. See if the companies youre considering offer any guarantees in case youre dissatisfied with the services, because it can be difficult to know what will come of attempted credit repair.
How Does A Low Credit Score Affect Me
You may think that your credit rating is a theoretical number that has no impact on your everyday lifebut that’s not quite true. Lenders and other creditors use your credit score to determine your creditworthiness. The lower your score, the less likely you are to obtain credit, which could be anything from a store credit card to a personal loan or mortgage. It may even hurt your ability to obtain a job if your potential employer seeks permission to check your credit file.
The End Of The Process
Investopedia: How can you tell that your credit has been repaired?
Weisman: You can determine if your credit has been repaired by checking your credit reports and credit scores with each of the three major credit reporting agencies however, you should regularly follow up checking your credit report and credit scores because sometimes inaccurate information that harms your credit score is removed after being disputed, but reappears on your credit report, thereby lowering your score later.
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Best For Transparency: Lexington Law
- Monthly disputes: 19 per 4560 days
- Lowest monthly fee: $24.95
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Free consultation for new customers
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Multiple discounts available
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Only 19 disputes per 4560 days
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No business credit services available
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Doesnt offer a money-back guarantee
Lexington Law is our top pick for transparency, as its website and customer representatives are very forthcoming with information. While many credit repair company websites lack details about plans and features, Lexington Law provides informative descriptions of its services and outlines the three-step process it uses to repair your credit. Plus, it offers a detailed frequently asked questions page and a free consultation for new clients where a representative can answer any questions you might have.
In terms of its services, Lexington Laws website offers three-tiered plans based on your level of need. Those seeking minor credit repair might opt for its Concord Standard plan, which costs $95.95 per month. If you need moderate credit help, the $119.95 per month Concord Premier plan may be a good option. And those seeking significant assistance might choose the Premier plan for $139.95 per month. Each plan comes with bureau challenges and creditor interventions, and higher-tier plans offer added services like TransUnion alerts, credit score analysis, and credit monitoring.
We were informed by customer service that there is another plan, not available on the website, with a first work fee and a monthly fee of $24.95.
Removing A Bankruptcy When You Actually Filed
According to Lexington Law, it removed 21,417 bankruptcies from client credit reports in 2012. This impressive number is misleading, however. Equifax, Experian, and TransUnion each publish information about your payment habits.
If Lexington Law removes erroneous reports for you from Experian and Equifax, it counts this as two removals. Also, Lexington Law does not subtract removals from its total when removals are later reversed and reinserted onto consumers reports.
The CROA outlaws five actions: 1) Credit repair companies cannot promise to permanently remove negative information from a credit report, even when the information is accurate and not obsolete 2) Require advance payment for credit repair services 3) Not provide a written statement of “Consumer Credit File Rights Under State and Federal Law” before any agreement is signed and 4) Fail to include in a contract conspicuous statements about the consumers right to cancel service within three business days.
A big problem with companies like Lexington Law Firm is the possibility that they over-promise what they can accomplish for you.
On Lexington Law’s website, it is careful not to guarantee success when you hire them. While Lexington Law may make it clear that they can’t guarantee removal, the fact that they list how many bankruptcies they’ve been successful at removing may lead consumers to make the leap that even accurate bankruptcy notations can be deleted.
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Get A Free Copy Of Your Credit Report
Its important to check your credit report frequently at the very least annually, if not more often to catch any irregularities early on.
Under federal law, you have the right to obtain a free credit report from all three major once a year. However, because of the pandemic, all three bureaus are offering free weekly reports through the end of 2022.
You can request yours through AnnualCreditReport.com, the only free credit report website authorized by the federal government. Make sure to check your reports from all three bureaus since each one can include different information from creditors and lenders.
You can also request them by:
Phone: 322-8228
Mail: Download, print, and complete the request form and mail to:
Annual Credit Report Request Service
P.O. Box 105281
Other ways to get your credit report
In addition to your annual report, you can request additional free copies if:
- You were denied credit, insurance or employment in the past 60 days based on your credit
- There are sudden changes in your credit limit or insurance coverage
- Youre receiving government benefits
- You’re a victim of identity fraud
- Youre unemployed and/or will apply for employment within 60 days from the date of your request
To request additional copies, contact the bureaus directly. Heres how to do it:
For a more detailed guide on how to request copies, make sure to read our article on how to check your credit report.
Getting Professional Help For Bankruptcy Disputes
Some people prefer to outsource credit disputes to someone else because theyre busy or feel overwhelmed by the process. If this describes you, you might want to consider hiring a reputable professional to help.
A credit repair specialist can send disputes to the credit bureaus on your behalf and follow up with additional suggestions if the credit bureaus fail to remove inaccurate data from your credit report. Call 1-877-637-2673 to schedule a free credit consultation with a Credit Saint counselor today.
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The Credit Repair Organizations Act
The makes it illegal for credit repair companies to lie about what they can do for you, and to charge you before theyve performed their services. The CROA is enforced by the Federal Trade Commission and requires credit repair companies to explain:
- your legal rights in a written contract that also details the services theyll perform
- your three day right to cancel without any charge
- how long it will take to get results
- the total cost you will pay
What if a credit repair company you hired doesnt live up to its promises? You have some options. You can:
- sue them in federal court for your actual losses or for what you paid them, whichever is more
- seek punitive damages money to punish the company for violating the law
- join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorneys fees
What Is A Credit Rating
Your credit rating is derived from your credit file, which contains information about your credit balances, limits, and payment history , as well as personal details such as your occupation and employment history.
Canada’s largest credit bureau, Equifax, uses a simplified scale of R1 to R9R1 being a perfect scorewhile TransUnion measures credit scores on a scale of 300 to 900, with 650 generally considered to be the dividing line between good credit and poor credit. Declaring bankruptcy will likely reduce your credit rating to the lowest level.
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Time Heals All Wounds
A bankruptcy stays on your credit report for seven to ten years, but its impact on your credit score changes drastically during that time.
If youve just emerged from bankruptcy, most of your debts have probably been discharged. You have a clean slate to deal with. Your job is to fill it with positive records that will build your credit score as the impact of your bankruptcy fades.
Theres one obstacle to that process: iyts not so easy to get new credit lines when your credit score has been trashed by bankruptcy. Heres how you can overcome that obstacle.
Understanding How Bankruptcy And Other Public Records Affect Your Credit Score
Typically, credit reports cover four major categories of information:
- Personal information: Your DOB, name, Social Security Number, etc.
- Borrowing history
- Public financial records
The last category is where bankruptcy falls under and can do the most damage to your credit. Public records originate from government documents such as county, state, and federal court records.
Bankruptcy has an immediate impact on your credit and a lasting one. So, brace yourself for what comes next.
Can credit repair remove bankruptcies? Here are the four significant consequences of filing bankruptcy:
1. The world will know you are bankrupt: When you file for bankruptcy, the issue stops being a private matter and becomes a public record. That means that anyone can access details regarding your bankruptcy whenever they want, and its undoubtedly a blemish on your reputation.
2. Not all debts are discharged after you file for bankruptcy: When you declare bankruptcy, you can get rid of the following:
- Collection accounts
Debts and responsibilities that cannot be discharged even after bankruptcy include:
- Child support & alimony
- Some taxes, such as the social security tax
- Debts incurred after filing bankruptcy
- Debts resulting from fraud or those belonging to someone else
- Federal student loans
- 7 to 10 years for chapter 13 bankruptcy
- 10 years for chapter 7 bankruptcy
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What Is A Credit Report
Your is created the first time you apply for credit or borrow money. It will contain information such as details about your credit cards and loans, including when you opened your accounts, how much you owe, when you make or miss payments, and if you go over your credit limit. A credit report also contains personal information such as if you have ever filed for bankruptcy.
The Case Offraudulent Bankruptcy
Fraudulent bankruptcymay result from acts such as identity theft or clerical error. It may be somecyber criminals or fraudsters impersonated you and got you into this troublewithout your knowledge. First, use the PACER system to access your bankruptcyrecords.
Once you detect sucherroneous inclusions in your credit report, move on to file a dispute with therespective credit bureaus. The first step is to ask the court to write a statementverifying that you have no bankruptcy declared.
Of course, be ready toprovide any identification documents and other related documents they willrequire of you. Once you resolve the issue with the court, write a disputeletter to each of the 3 credit bureaus.
In case the creditbureaus find out your name was included erroneously, they will proceed to makechanges on your credit report. This normally takes a couple of weeks. Exercisesome bit of patience.
This whole process mayprove too tedious for some individuals. Dont fret the companies are there for you. A carefully chosen company will be able to get outthe bankruptcy record from your credit report without you incurring uncalledfor expenses.
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How Does Bankruptcy Affect Credit Score
Obviously, bankruptcies always negatively impact your credit report. How big an effect varies. Having more accounts that are included in your bankruptcy will have a bigger impact than if its just one car loan or credit card.
Your credit is rated on whats called a FICO score, which ranges from a perfect score of 850 to a low of 300 based largely on things lenders see on your credit report: your payment history, debt burden, how long youve had credit and the types of credit used. How badly bankruptcy damages your score depends on how high it was in the first place.
According to FICOs published guidelines, someone with a 680 credit score considered a good score would drop between 130 and 150 points into the poor range. Likewise, a 780 credit score would drop between 220 and 240 points, also into the poor range .
In each case, qualifying for a mortgage after bankruptcy or buying a car with credit after bankruptcy will prove to be difficult until you can rebuild your credit. That takes time and effort.
What You Should Know Before Hiring A Credit Repair Company
There are some things to keep in mind when you’re trying to rebuild your credit history.
It can take from three months to a year to see an improvement in your .
Not all negative information can be removed
Late or missed payments, hard inquiries, charge-offs, repossessions and debt collections can only be removed if the information is inaccurate or outdated.
You should stay away from companies that guarantee they can remove accurate information from your report or promise you a new credit identity, for example.
For steps on how to deal with negative items that cannot be removed, read our guide on how to repair bad credit.
You have to do some of the legwork
You may have to provide credit repair agencies with documentation to support disputes of negative information on your credit report.
Most companies have setup fees
Most charge an initial fee that can range anywhere between $15 to $200. This fee is used to set up your account, which may involve gathering your personal and financial information and creating a strategy plan for your particular credit situation.
Once you pay the setup fee , companies cant make any additional charges unless they prove that the services offered to you in their contract are being fulfilled.
Legitimate credit repair companies should include a copy of the Consumer Credit File Rights
You have the right to cancel any services without incurring any penalties within 3 business days
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How To Dispute Accurate Information In Your Credit Report
Accurate items in your record can’t be removed before the term set by law expires, which is seven years for most negative items. For example, if you truly missed payments on your credit card, your dispute to remove that information will be denied. However, the information will automatically fall off your credit report seven years from the time you missed the payments.
If you do have valid negative items on record, here are some things that might help:
File A Dispute On Your Own
There is nothing that Lexington Law can do for you that you can’t do for yourself. When it comes to removing a bankruptcy that shows on your report, file a dispute with each of the consumer credit reporting agencies when the bankruptcy appears in error. If you don’t feel you can handle filing a dispute yourself or are too busy to take care of it, then you should consider hiring Lexington Law or another credit repair firm.
Don’t hire anyone to dispute a bankruptcy that you actually filed. The bankruptcy should fall off your credit report 10 years after the filing date, according to federal law. The credit bureaus remove Chapter 13 bankruptcies after 7 years. The negative accounts included in the bankruptcy should fall off 7 years after their date of first delinquency,even if the bankruptcy notation remains in the Public Records area.
Bills Action Plan
- Check your credit report for errors on a regular basis. You can get a free report at annualcreditreport.com.
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That Brings Us To Your Question: Can Credit Repair Remove Bankruptcies
Yes! Credit repair does help remove bankruptcies. And while youll hear that getting bankruptcy off your credit files is impossible and credit repair wont help. That isnt true.
Reputable credit repair agencies are all about helping people and changing lives. Hiring experts is an excellent way for those looking for a hassle-free process and want to make sure that a professional will handle the situation.
Professional credit repair can make a world of difference for those bogged down by debt by removing bankruptcy and other harmful items on their credit reports.
How To Choose The Right Credit Repair Company
When evaluating credit repair companies, you should compare the services they offer and their upfront and monthly fees. Consider how many items they dispute per month and if they offer any additional perks such as free consultations or personal finance tools. You can also gauge a company’s reputation by reading online consumer reviews and checking whether it has any lawsuits against it.
Check for Credit Repair Organizations Act compliance
CROA establishes clear directives that legitimate credit repair agencies should follow, and its important to ensure the company you choose is compliant in every step of the process.
Companies must provide a written contract explaining in detail the services they will provide, how long it will take for them to get results, any guarantees they offer and the total credit repair cost for their services.
You have the right to walk away without penalty within three days of signing the contract if it doesn’t meet your requirements.
Read customer reviews
These websites are helpful, but we recommend complementing what you read with further research after all, most people post reviews when theyre unhappy with a service, not when theyre satisfied.
However, if you read multiple reviews alleging similar issues, you should certainly consider it a red flag.
In our search for the best credit restoration services, we focused on those that received mostly positive consumer feedback across multiple review websites.
Check the regulatory agencies
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