Credit restoration is a process of disputing errors on your credit report with the goal of getting them corrected. This can be done on your own or through a professional company that offers credit repair services. It can take time, but it’s worth the effort if you need a good credit score to get a loan, mortgage, or credit cards at reasonable interest rates. It also can help you get a job, because many employers check your credit before hiring you and may not hire applicants with bad scores.
There are many things that can hurt your credit score, including identity theft, a foreclosure, a bankruptcy, late payments, and collection accounts. Many of these items can stay on your credit report for seven to 10 years. Restoring your credit score can be a lengthy process, but it’s worth the effort to improve your financial health and build up a solid reputation as a responsible borrower.
One of the first steps in restoring your credit is to get copies of your credit reports from each of the three major credit bureaus—Equifax, Experian, and TransUnion. Review these reports carefully and dispute any errors you find. The Fair Credit Reporting Act requires the credit bureaus and creditors to correct inaccurate information on your report. It also gives you the right to request that accurate negative information be removed from your credit report.
While credit repair companies may be able to help you remove inaccurate items from your report, they can’t fix mistakes that aren’t your fault. For example, it’s not a credit repair company’s responsibility to get an employer or landlord to change your name or social security number to remove a negative credit entry for a debt you didn’t pay. In addition, a credit repair company can’t advise you to lie to a credit bureau or creditor.
A credit restoration company can help you with your debt-to-income ratio by helping you create a budget and encouraging you to use prepaid debit cards. They can also teach you the importance of establishing an emergency savings fund and helping you to make wise choices with your money. They can also show you how to monitor your credit report regularly and what can have the biggest impact on your score.
A good credit restoration company can help you work with the credit bureaus to dispute errors on your report and can even help you negotiate with creditors to remove incorrect negative information. They can also assist you in obtaining a fresh start bankruptcy if necessary. However, it’s important to remember that it won’t be possible to get your credit score back to where it was before the damage was done if you continue to make bad decisions like paying your bills late or maxing out your cards. That’s why it’s best to see a credit counselor who can provide you with guidance for improving your spending habits.