Credit Repair

Credit Repair: All That You Need To Know At Your Fingertips

What is Credit Repair?

Credit repair entails taking the requisite steps to improve your credit score, which may have suffered as a result of a variety of factors. Credit Repair is the process of identifying these causes and making the required adjustments to your debt management and credit utilization patterns.

Credit repair can be of two types: Disputing any errors or misinformation in your credit report; Identity theft is one such case. 

Another form of credit repair is fixing the fundamentals of your finances by helping you devise better budgeting and money management. 

How does credit repair work?

Credit repair is a meticulous process; It cannot be done overnight. You need to gather all the necessary information to prove any errors or misinformation on your credit report so that the bureau will rectify it. 

  1. Once you have all the information on hand, you can contact your lender or the credit bureau to raise a dispute on the errors.
  2. They then scrutinize your dispute and see if there is any merit to your request.
  3. If they find that the error was legit, they will update their records.
  4. This rectification will reflect only in your next credit report.
  5. If the entry or information you dispute is not erroneous, they will reject the dispute.

This process may take some back and forth between you and the bureau before the issue is completely resolved. However, once the issue is resolved, your credit report will look good. 

What are credit repair agencies?

There are a number of Credit Repair Agencies in India that offer professional help with your credit score. The credit repair agency will connect with the credit bureaus on your behalf to get any errors or misinformation corrected. 

For example, CreditMantri offers a free credit score along with a detailed credit health report (CHR) which points out the improvement areas on your credit report. CreditMantri also offers CIS (Credit Improvement Services) to help you boost your credit score. They will also contact the credit bureau on your behalf and rectify any errors on your credit report. 

There are many such credit repair agencies that can help you repair your credit. 

Can’t I repair my credit by myself?

Yes, you very much can. If you have the time and patience, you can get it done by yourself. Here are the steps you can follow: 

  1. Get your latest credit report from the credit bureau. Every individual is entitled to get one free credit report in a year. Use this opportunity to get your latest credit report.
  2. Go through all the items on the report and verify them against your records. Ensure that the report reflects all the right payments and amounts. Verify them against your bank statements. 
  3. Note down any discrepancies you may come across. 
  4. Contact the credit bureau and raise a dispute on the discrepancies. You will be required to provide the required documentary proof to substantiate your claim. 
  5. Once the dispute has been accepted, the credit bureau will rectify it and update your records. 

As previously said, there will be some back-and-forth between you and the bureau in order to settle the disagreement. It can take a long time at times. Credit repair companies will assist you in this situation by liaising with you and the bureau to address the problem.

When should I seek credit repair?

Generally, if you find that your credit score is constantly stuck below the 750 range and needs improvement, you can go for professional credit repair. Getting help on your credit repair will make life easier for you. The credit repair agency will handle all the procedures and get your credit report cleaned up. 

Credit Repair Fixes Your Credit Report, Not Your Credit Score

This is something you have to understand from the word go. Credit repairs will find and eliminate any errors on your credit report. They don’t assure you of a high credit score. Removing erroneous entries may have some positive effect on your credit score but they may not improve your credit score drastically. So, be wary of companies that guarantee you instant credit score improvements. 

You Cannot Remove Entries That Are Accurate

Only those entries that are erroneous can be removed from your credit report. You cannot remove an entry that is correct, even if it is affecting your credit score negatively. 

The principle of credit bureaus is based on transparency and they report all relevant entries whether they are negative or positive for your credit score. 

Closing Down A Credit Card Account May Not Be Helpful

If you think closing down old accounts will help with your credit score, think again. Even settled or closed accounts will stay on your credit report for some time before they are dropped. 

Also, closing down credit cards will lower your available credit, affecting your credit utilization ratio. This will only be adverse for your credit score rather than helpful. So don’t be in a hurry to close down old accounts. 

Don’t Expect to see Improvements Overnight

If you have sought the help of a professional credit repairing agency, well and good. But don’t expect results overnight. Your credit report considers your most recent credit history. It will be a few months before the disputes are resolved and the positive changes are reflected on your credit report. In the meanwhile, you can follow some healthy credit habits like paying bills on time, lowering your credit utilization ratio, etc., 

Key Takeaways

Credit repair is a continual process rather than a one-time thing. There are a few different ways of credit repair and it solely depends on your credit report and what needs to be done to get your credit on track. If you feel that the task at hand is tedious, don’t hesitate to get the help of a professional credit rep-air agency. For what it’s worth, you can clean up your credit report and improve your credit score a few notches. 

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