Credit Repair Done Online

The main culprit which normally causes bad credit score amongst most consumers is late payments for your monthly financial obligations. These come in the form or late payment for your credit card bills, your utility bills, your loans etc. In the perfect world there really shouldn’t be any reason for a late payment on any bills. Unfortunately late payments do happen and also quite frequently especially if an emergency came up which has drained your cash flow for the month. The problem is that most consumers don’t know how to handle this situation and often falter here causing bad credit score problems.

The amount owed and severity of the late payment (i.e. how long the delay is) will be factored into the report that the lender / creditor will furnish the credit bureaus. The problem is that these credit bureaus will keep all records for at least 7 years so every late payment that you make will stay there and contribute to your poor credit history.

The problem is that each lender / creditor has the right and the discretion on how they want to report the financial infraction to the credit bureaus. Some agencies will report you the day after your payment is due while some other agencies will be more lenient and not report unless you are consistently late or you are late for a long time (e.g. one week). Simply by looking and analyzing credit reports a normal late payment will generally make your credit score go down by 50 point. In the whole spectrum of things 50 points is actually a very severe penalty and can be the difference between approvals or not when it comes to many loans.

There are many credit repair agencies that claim to be able to repair your bad credit rating and help you get the loan that you need however it pays to be very skeptical about these kind of firms. Credit repair isn’t actually possible; rather it is just common sense steps in which you can do to slowly build your credit score back to normal. Some agencies will offer invaluable information about how you can set yourself up to best repair your credit. There are some important steps that you can do before even considering the use of credit repair agencies which can already help you to start your own credit repair process.

First of all it is important to realize that you are entitled to a free credit report every year from each of the 3 large credit bureaus. These credit reports although not very informative by themselves will provide the basis to knowing what your credit score is and also help you with determining what is the best way to develop your credit repair strategy.

Research into the accuracy of credit reports have indicated that as many as 30% of credit reports have errors in them. These errors are also skewed towards the negative as almost all information in credit reports will only show the negative activities in your management of your finances. It is for this reason that you must obtain your credit report. You must look through your credit report with detail and find any errors that might have taken place. Every error must be reported in writing to the credit bureaus with the supporting documents in order to prove the claim so that your report can be put right.

Once the errors are reported then the credit reporting bureaus will get back to the financial institutions about the erroneous transaction details and it is investigated there before the relevant information is then forwarded back to the credit bureaus. Most of the time the financial institutions will take up to 30 days to investigate the claim before getting back to the credit bureaus. Once the information is verified to be correct and the dispute closed it is then reported to the three large credit reporting bureaus and correction on the database are made to reflect the new chances. The whole process generally takes up to 3 months to complete.

If however your dispute to have the error corrected fails then you have to option to request to provide a statement regarding the dispute in your credit files. This statement can be in the form of evidence that you may have regarding the affected transaction to back-up your claim or even a written narrative to explain the situation.

With regards to the credit report, it should be noted that all information is kept for a minimum of 7 years. If you have been bankrupt before then the information is kept for 10 years by the credit reporting bureaus. It is for this reason that having a negative mark on your credit score and credit report can be such a damaging thing purely because it stays with you for such a long time.

If you have already decided that you need the help of credit repair companies then there are a few points that you have to take into consideration before you choose one. The first thing that would shock most customers is that the majority of credit repair companies set-up are mainly to drain precious money from consumer who want to repair their credit but don’t know the first thing about it. Basically they are just financial consultants who tell you how to "repair" your credit by offering common sense ideas.

The first thing to be aware of is that legitimate credit repair companies have a very solid contractual agreement with any of their clients. The contract that they normally draw up will include such things at the company’s rights, their guaranteed offer (if they have one), their payment duration, their payment terms, their total costs and other incidentals. An air-tight contract is a sign that the credit repair company is genuine and can be trusted.

Another sure sign way to determine that a lender might be more interested in the money that they will receive for the “service” is if the agents that you talk to ends up sounding more like a salesmen rather than a credit repair professional. Most of the time a credit repair professional will act and talk more like an accountant with a set of very detailed questions that they have to ask instead of trying to push you to buy more of their products.

If you have any doubts about a credit repair company that you might have applied too then it becomes your responsibility to bring the company to the attention of a consumer affairs officer or even your state attorney general so that no other unsuspecting consumers fall into their potential trap. Don’t wait until something bad has happened to you for you to lodge a report. Take a pro-active stance and avoid being put in the bad credit customer basket unnecessarily.