What Is Bad Credit?

If you have bad credit, you are in need of some major repair. Don’t believe all that you hear about credit repair companies.

To find out if you have bad credit, you first need to obtain a free credit report from each of the three major credit reporting agencies – Equifax, TransUnion and Experian.  In the process, you’ll also want to purchase a credit score.

In today’s financial climate anything below 650 could be considered a low credit score.  If yours falls below that number, scrutinize your free credit reports for inaccuracies, incomplete information and inquiries that you did not approve.  At this point, one of your options would be to hire a credit repair company to address your findings and get your score back on track. 

Video: 6 Effective Ways to Improve Your Credit

Myth #1:  Credit Repair Companies Are Scams

No, not all credit repair companies are scams.  There are some very reputable ones out there.  Some things to watch out for are claims that they can remove ALL bankruptcies, liens, judgments and negative information from your credit report.  If they make those claims, then they are not being honest. 

Credit repair companies provide a service whereby they interact with major credit reporting agencies to resolve negative impacts to your credit report and score.  They will address the inaccuracies and make sure that appropriate corrections and updates are made to your credit reports.  This is how the process works:

  • You provide the company with a copy of your credit reports.
  • They make recommendations as to which items you should dispute.
  • They work directly with the credit reporting agencies to dispute the items.

Credit repair companies can only have inaccurate information removed and items that exceed the statute of limitations for reporting those items.  In addition, you should never pay a credit repair company until they have completed their services.  Before selecting a company, ask them up front what their fees are and when they collect.  Get it in writing.  If they want payment before their work is complete, then they are not abiding by the Fair Credit Reporting Act (FCRA).

Myth #2:  You Have to Hire an Attorney or Company to Repair Your Credit

This is absolutely false.  Of course, you may choose to hire an attorney or credit repair company to address the disputes for you if you so desire. 

You are not, however, required to hire an attorney or a credit repair company to repair your credit for you.  This is something you can do yourself.  It will just take some time and effort on your part.

Myth #3:  It Is Both Complicated and Difficult to Repair Your Credit

This, too, is incorrect.  It is actually simple and easy to repair your credit.  It will, however, take some effort on your part to do it right. 

There is certain information you should include in your correspondence with the major credit bureaus to ensure that the specific items you need changed are actually changed.  The process is quite simple.  You just do the following:

  • Obtain copies of your credit reports from all three major credit bureaus.
  • Identify inaccurate, outdated, incomplete information and inquiries you did not authorize.
  • Circle all information you want disputed.
  • Write a letter with all the disputed items noted.
  • Send a letter to each credit bureau with the appropriate information noted, along with copies of the respective, circled disputed items and any supporting documentation.  Make sure you send a copy and keep the originals for your own files.

Video: Can You Get a Free FICO Score?

Myth #4:  You Can Repair Your Credit INSTANTLY!

Ummm, No.  You cannot repair your credit instantly.  Anyone who ever tells you that is either being incredibly optimistic or is flat out lying.

It takes time to repair your credit.  Some credit bureaus can verify the correct information in a fairly short amount of time, but not always.  They have 30 days to respond once disputes are received.  If they do not respond within that timeframe, they have to delete the information from your credit report.

Credit repair companies cannot repair your credit instantly, either.  They can, however, ensure that your credit report is corrected within the timeframe allotted by law.  Once their communication with you has determined which items you will be disputing, they will submit their findings to the major credit bureaus.  The major credit bureaus have 30 days to verify the information and make any required changes to your credit report.

There are innumerous credit repair companies out there that advertise their services.  Below are several who are considered reputable by many in the World Wide Web world.

Lexington Law
Hdqt.  in Utah – Locations throughout the U.S.
800-214-0922

Sky Blue Credit Repair Services
Delray Beach, FL
800-790-0445

DSI Solutions
Whiting, IN
866-382-3410

Ovation Credit
Jacksonville, FL
866-639-3426

Veracity Credit Repair
Denver, CO
866-518-2194

Apex Credit Services, LLC
Saint Albans, WV
888-727-4818

My Credit Group
San Marcos, CA
800-430-7494

Academy Credit
Farmington, UT
800-857-5268