In my opinion paying a company to “repair” your credit is one of the stupidest things a person who walks the Earth can do. So why is paying a company to repair your credit so stupid? Simply put I feel that credit repair companies are the hugest scam business on the face of the earth.
Think about this….an “affordable” credit repair company will charge you an initial fee of say $95 plus an additional $59 per month. If it takes the “affordable” credit repair company 4 months to “repair” your credit you spent over $300 to achieve something you could have done yourself for less than $20! Of course we all pay for things that we can do ourselves but in my opinion this is because we choose to pay others to do things we find to be unpleasant such as mowing our lawns, doing laundry or even going grocery shopping. I believe this is the very reason that these BS credit repair companies continue to thrive as most people equate credit repair to be some unpleasant, needing to be a credit expert sort of thing. Why not pay over $300 to pay someone to deal with the unpleasantness of repairing credit? It’s not unpleasant, is super easy and something you can easily do yourself!
DISCLAIMER…..KNOWITALL is not an attorney, does not claim to be an attorney and is not practicing law without a license in any state within the United States of America. KnowItAll is simply sharing his knowledge about what KnowItAll has learned about credit and credit repair services!
Now that the above is out of the way lets move on. If you’ve come across this post it may be because you’re thinking about hiring a credit repair company to help you repair your credit. You have crap credit and want to join the 700+ credit score club. For whatever reason you went into Google and typed in “Is paying for credit repair stupid”…..or “is paying for credit repair stupid?” or even “credit repair for the stupid” and came across my awesome blog.
In order to understand how to repair your own credit you must first understand how credit works. Simply put there are 3 agencies that provide credit scores. When you apply for a loan of any sort or a credit card the finance company or bank that you apply with will take your median score or the middle of the 3 scores to arrive at a Yes or No also known as your mid score. The 3 credit agencies are Equifax, Experian and TransUnion. Each have their own model to arrive at your score. Of course I don’t know what the individual models but factors consist of things such as how long you have had established credit, what are your credit limits, the amount of credit you have out with regard to your credit limit and your payment history. Each agency is bound by the Fair Credit Reporting Act which simply put is U.S. Federal Government legislation that was enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies.
Before I go any further I must state that you cannot dispute accurate information. If I wasn’t clear let me put this in a different way for you…. YOU CANNOT DISPUTE ACCURATE INFORMATION! That’s right people….if you had an Amex card with a $10,000 limit, maxed it out for whatever reason and Amex charged the account off and is now trying to collect you cannot dispute that fact. You did max out the card and now you have to deal with it! This $10K Amex charge off will be accurately reported, will affect your credit score and will appear on your credit report for SEVEN (7) Years from the time the account went into collection!!
There is not a credit repair company on the face of the planet that can “permanently” erase accurate information but a little more on this later. The only thing a credit repair company can do is help you erase inaccurate information. Again….THE ONLY THING A CREDIT REPAIR COMPANY CAN DO IS HELP YOU REMOVE INACCURATE INFORMATION!! To put this in other words your credit score sucks because you don’t pay your debt so there is nothing you can do about it. If this is your case stop reading now as this post will in no way, shape or form help you become a responsible human being. You’ve been irresponsible for whatever reason and now you must live with the consequences which in this case may result in being denied for a secured credit card. Go to the top of your browser, click on the ‘X” in the upper right hand corner and enjoy your deadbeat existence! Just kidding so stop being so uptight.
So if there is no credit repair company that can erase accurate information why do credit repair agencies exist at all? Great question! In my opinion it’s because most people don’t understand credit in general, don’t want to understand t it, don’t want to learn about it and feel that you need to be an expert in credit when in fact its not complicated at all. With that being stated here is KnowItAll’s guide to self credit repair for those who know that have shitty credit or in other words paying for credit repair is stupid or in other other words go FUCK YOURSELF CREDIT REPAIR COMPANY!
KNOWITALL’S GUIDE TO SELF CREDIT REPAIR WHEN YOU KNOW YOU HAVE SHITTY CREDIT
Step 1 – As you are legally entitled to receive a FREE copy of your credit report every 12 months obtain such FREE CREDIT REPORT by going to a site such as AnnualCreditReport.com. Keep in mind you won’t obtain your credit score but since you already know you have shitty credit you don’t need your score right now anyway. All you want to do at this stage of the game is to get a hold of your credit report and review it for inaccurate information.
Step 2 – Review said FREE credit report for inaccurate information.
Step 3 – Highlight said inaccurate information with something like a highlighter or better yet an actual highlighter.
Step 4 – Write a letter to the respective credit bureau and make sure to include all the below information.
– Your full name including middle initial (and generation such as JR, SR, II, III)
– Your date of birth
– Your Social Security number (if you have never been issued a social security number, please note that in your request)
– All addresses where you have lived during the past two years
– One copy of a government issued identification card, such as a driver’s license or state ID card, etc.
– One copy of a utility bill, bank or insurance statement, etc.
– List each item on your report that you believe is inaccurate, the account number and the specific reason you feel the information is incorrect.
Step 5 – Place said letter with supporting documentation in an envelope.
Step 6 – Write your return address and the address of the agency on the envelope.
Step 7 – Place a stamp in the upper right hand corner of the envelope.
Step 8 – Place the envelope into a mailbox.
Step 9 – Wait for the response letter from the agency.
Step 10 – Jump for joy or respond to response letter.
END OF KNOWITALL’S GUIDE TO SELF CREDIT REPAIR WHEN YOU KNOW YOU HAVE SHITTY CREDIT
Pretty simple, right? “OK KnowitAll, I’ve read your stupid F****ING Guide and my credit report is 100% accurate. What the F**K do I do now?” Don’t worry…I have another guide for that.
KNOWITALL’S GUIDE TO SELF CREDIT REPAIR WHEN YOU KNOW YOU HAVE SHITTY CREDIT AND THINK YOUR CREDIT REPORT IS ACCURATE
Let’s go way back to this post where you had an AMEX card with a $10K limit and banged the hell out of it like it was a chick with a huge rack, slim waist, great ass and the face of a goddess. Hold on….I’m many things but not a sexist so for you ladies who are reading this post I’ll rephrase. Let’s go way back to this post where you had an AMEX card with a $10K limit and banged the hell out of it like it was….(INSERT WHATEVER YOU LIKE HERE.)
What you want to look for is accurate information that is being reported more than it should be. Using the $10K Amex card example let’s say that Amex sold the debt to a collection agency who sold the debt who sold the debt who sold the debt. You look at your FREE CREDIT REPORT and see that it is indeed a collection account you owe but it’s being reported by FIVE (5) different collection companies but it’s the same debt. Only ONE (1) collection company can collect the debt yet the same debt is being repeated over and over again. That scenario is screwing up your credit score so admit to the debt but state that it is being over reported as just one of these account can have a tremendous impact on your score. Although you actually owe the collection account in your letter state the other collection accounts are actually one in the same and that you need those other FOUR (4) collection accounts removed. Once those 4 collection accounts are removed it will have a positive impact on your credit score.
Okay so earlier in this post I wrote that there is not a credit repair company on the face of the planet that can “permanently” erase accurate information. This is fact yet there are many credit repair companies that promise to raise your credit score. How can a credit repair company promise to raise your credit score even if they can’t have accurate information removed?
The credit reporting agencies have 30 days to respond to your dispute or 45 days if you have obtained a copy of your free credit report. What the credit reporting agencies do when they receive your dispute is to contact the creditor. If the creditor fails to respond within the 30 day or 45 day timeframe the account must be removed from your credit report. I own a credit repair company and sing my own praises by stating “I just raised your score 30 points!” In reality I did raise your credit score but I didn’t say for how long. Lets say the creditor responds TWO (2) months later with supporting evidence that the account is indeed yours. The credit reporting agency simply puts the negative account back onto your credit profile thus bringing your score back down to where is was supposed to be to begin with. Congratulations…..you just paid me for no reason!
The bottom line is that if your credit score sucks and your credit report is 100% accurate the only thing that is going to help improve your credit score is time! Yup there are no tips or secrets that is going to take you from a 550 credit score to 800 if all of the information on your credit report is accurate. However, here are a few things that you can do to help improve the situation.
1. If you have a family member that has excellent credit ask that that person include you as an authorized user on his or her account. Once the person does this for you that account and most importantly payment history will appear on your credit report thus making it seem that you are a responsible human being. Your family member or friend knows you’re not so simply tell that person to destroy the card once it comes. Sure you won’t be able to use it but it will help you.
2. If you have a ton of collection accounts paying them off is not going to improve your credit score. However if you want to be responsible and take ownership of your debt and pay the collection accounts off. However, NEVER EVER EVER pay the actual amount. Open a line of communication, admit that the debt is yours and state that you want to take care of it. The collection agency will settle for a lesser amount meaning that in most cases you can settle a $2,000 collection account for hundreds. Best of all many will enter into a repayment agreement along you to spread the payment amounts across a few months maybe even a year. Keep in mind that many employer now as part of their hiring process obtain your credit report. Having terrible credit isn’t a crime but would you be more willing to hire someone who takes accountability or a person who just shrugs his or her shoulders? At least you can stop those collection calls from coming in daily.
3. Obtain a secured credit card. A secured credit card is pretty much the same as a pre paid debit card. You pay the credit card company a one time fee of say $100 and send in a check for $300. You now have a $300 credit limit. If you place a charge on the account you must pay the bill the same way you would pay an unsecured credit card. The credit reporting agencies will place that account on your credit profile. After a while you will start getting offers for unsecured or regular credit cards again. An unsecured credit card is a great way to help improve your credit standing.
So the above is why I feel that paying for credit repair is stupid. However, you may not feel the same way. Maybe you feel you just don’t have the time or simply prefer to have a company take care of the dispute process for you. At minimum I hope this post has improved your knowledge of credit reporting, credit scoring and how to dispute errors.