Credit Repair

Credit repair summary:  

• If a company promises they can remove all negative remarks from your credit report—even if they're accurate—they are lying. Only inaccurate information can be removed. 

• You can handle credit repair yourself by reviewing your reports and disputing errors, or you can hire a company to help you take care of the task. 

• Once inaccuracies have been removed, it's a good time to learn about the factors that impact your score and how you can control them. 

Freedom Debt Relief isn't a Credit Repair Organization and doesn't provide or offer services or advice to repair, modify, or improve your credit.

Credit Repair Definition and Meaning 

Your FICO® Score—the credit scoring system U.S. creditors most commonly use—ranges from 300 to 850. Generally, the higher your score, the easier it is to qualify for low-interest loans and other financial products. Your credit score is based on information reported to the credit reporting agencies. Sometimes, this information is incorrect, which could lower your credit score. Removing it may help boost your score.  

More About Credit Repair

Having inaccurate information removed from your credit report is only the first step on the road to improving your credit. Next, it's essential to learn more about the factors that affect your credit score and work on improving them, too. 

Here are the five factors that play a crucial role in your credit score and how lenders view your ability to repay a loan. Fortunately, none of these factors are outside your scope of control. 

1. Payment history: Consistently paying bills on time gives your score a boost.

2. Credit utilization: Credit utilization is how much of your total credit limit you're using at any given time. In short, the less of your available credit you use at one time, the more confident lenders are in your ability to repay a loan. 

3. Length of credit history: The longer you've been using credit well, the better the reflection on your credit score. Don't cancel old credit cards, even if you rarely use them.

4. Credit mix: Maintaining a variety of credit types, such as loans, mortgages, and credit cards, shows creditors that you can handle different kinds of credit. 

5. New credit applications: Creditors get a little nervous if they see you've applied for too much new credit in a short period, and your score may drop as a result. Instead, carefully decide when you need to apply for new credit, and do so only when necessary. 

Effective credit boosting requires a two-prong approach: Ensuring there are no mistakes on your credit report, and taking control of the other factors that impact your score. 

Credit Repair: A Comprehensive Breakdown 

Given all the information gathered on a single credit report, it's easy to imagine that one little mistake won't make a difference. However, everything on your report matters. Here are some of the most common credit report errors to look for:

• Individual loans listed multiple times, making it appear that you have more debt than you do

• Accounts you've already paid off but appear as unpaid

• Debts that aren't yours, and actually belong to someone else with the same name

• Misspelled names, incorrect addresses, and other basic personal information that's not quite right

• Information that made it into your file, but which belongs to someone with a similar name or Social Security number

• Information reported as a result of identity theft.

Your first step is to order a free copy of each of your credit reports from annualcreditreport.com. Go through each report line by line, looking for inaccurate information. If you find mistakes, dispute them with the credit reporting agency in question. In other words, if you find an error on a TransUnion report, dispute it with TransUnion. Generally, the credit bureau has 30 days to investigate your dispute and prove the information is correct or remove it from your report. 

As mentioned, you can conduct credit repair on your own, or hire a company to take care of the task for you. If you intend to pay a company to help you boost your credit score, keep an eye out for these red flags:

• They ask for upfront fees.

• They guarantee they can remove negative information, even if it's accurate.

• They don't explain your rights according to the Fair Credit Reporting Act.

• They tell you not to contact the credit bureaus.

• They promise to help you create a new credit identity (which is illegal).

No matter where your credit score stands, it's possible to give it a makeover. It takes time, but by ensuring your reports are accurate and adopting healthy credit habits, your score is sure to rebound.