The Mountainous Cost of Credit Repair

  • Your car decides to never run over 15 miles per hour. Something is definitely wrong. This is going to cost you….
  • In a wind storm a large branch falls on your roof putting a hole in it and it is about to start snowing. This is going to cost you….
  • While playing with the kids, one of them takes a step back for a better run at you. Their step back lands on your laptop and you hear the crunch of plastic. You don’t even want to open it up because you know this is going to cost you….
  • At the gym, you are playing a pick-up game of basketball. As you come down from a particularly acrobatic behind-the-back and between-your-legs layup, there is a ‘pop’ in your knee and you fall to the ground. You aren’t sure what’s wrong yet, but you know that even with insurance, this is going to cost you….
  • Even though you have been very responsible with your credit, you get turned down for a new credit card due to an item on your credit report from a bank you didn’t even know existed. It can be fixed, but this is going to cost you…. ABSOLUTELY NOTHING!!!

Who’s Using Your Report

Yes, just about all of us know our credit report and resulting credit scores are important to us. First, let’s back up just a bit. Do you even know who uses your credit report information? Here’s a list of who is looking (with your permission):

  • Lenders – Any time you are considering taking out a loan, they are going to assess the risk of lending you money by looking at your past history.
  • Landlords – Again, it’s a risk assessment of how well you pay your bills on time. In other words, are they going to have to hunt you down and bring in the courts just to get a month’s rent?
  • Current/Prospective Employers – Particularly if you are working with money, they want to know if you have any particularly high incentive to ‘lose’ some of it.
  • Licensing Agencies – If you are applying for a professional license and your career will involve other people’s money, what will you be tempted to do with said money?
  • Insurance Companies – Hey, they are all about risk management. Are you likely to file a claim? This will also play a role in setting how much you pay in premiums.

Look In The Mirror – Get Your Report

Yeah, your credit report is a pretty big deal. So big in fact, that the federalEquifax Logo government has mandated that every American can get one free copy of their credit report from each of the three main credit bureaus each year. AnnualCreditReport.com is the website they have set up to get those free credit reports from Experian, Equifax, and Trans Union. You simply provide some personal information on the secure site and they show your report on the screen and give a link to a printable version.

It is always worth reviewing, even if you are responsible. If you pay Experian Logoattention to the news at all, you know the dangers of fraud and identity theft. The crooks, being what they are, can be quite good at covering their tracks – the bills for debts in your name will not be sent to your home address. Aside from fraud, the different reporting companies and credit bureaus are filled by…… humans. They do their best, but unless we can claim perfection, we have to understand that mistakes happen. That’s why there is a process in place to correct errors on your credit report.

The first step is to get your credit report. Logging on toTrans Union Logo AnnualCreditReport.com, you can choose to get any one, two, or all three of your free reports for the year. Sometimes a debt will show up on one or two reports, but not on the other, so you may want to compare. Taking a longer-term approach, you may want to pull only one at a time, but pull a different one every four months. This can allow you to keep a better running pulse of your credit.

Now the credit report may be a bit lengthy (printed, mine came to 28 pages), but don’t get overwhelmed by it. At the beginning should be a brief explanation of what each code means if it is used. My Experian report was even color coded to more easily identify the potential impact of each item.

How To Fix A Flat (Credit Issue, That Is)

So you have dived into it, reviewed the credit world’s view of you, and found something that just isn’t quite right. Perhaps it is an account showing ‘late’ that you know you have paid on time. Or maybe it’s a loan with a lender you don’t recognize. There is a process for getting those erroneous items off of your report.

If you are looking at your report online, they make it fairly easy by providing links that allow you to dispute the facts electronically. This will at least get the process started. If you find something wrong, you also need to do a little homework and dig up any documentation that you can find. For example, if they report you paid late, find your bank statement that shows you paid on time.

You can also dispute items via mail, but even if you start online, you may also need to send a signed request in writing with your documentation. The contact information is all provided in the report whether you are looking at it online or printed. If you do, send it via certified mail. It will cost a couple of dollars more, but you get a signed receipt showing that they actually received the information.

The disputed item may disappear from your credit report while it is being reviewed, but follow up. If they decide it is a legitimate debt, IT WILL RETURN. You (or someone else on your behalf) may make all of your negative items disappear by disputing them, but this will probably only be short-term. If the debt really is yours, it will be put back on your record. If the debt isn’t yours or cannot be verified, it will stay off of your report.

Now that we have a better grasp on the report and process, let’s go back to the cost…..ABSOLUTELY NOTHING!!! You are perfectly capable of doing every task necessary to dispute bad items on your credit report. Doing it by yourself, the only cost to you is the paper your report is printed on and perhaps some postage to send documentation in as a part of the dispute.

Other Help Available

While you most likely don’t need it, there are others that can help with the process.

There are for-profit credit repair companies out there that will take care of the work of disputing items on your credit report for you. They will pull your report, review it with you, and then take care of the whole dispute process. All of this, of course, comes with a fee. Yes, some people have had success and swear by these companies. I will tell you that we have also had clients who started with credit repair companies, paid them $1,000 or more, and saw absolutely no change in their credit report and resulting score. Be sure you are beyond the dispute review period and anything that is going to return already has before deciding your satisfaction.

There are also not-for-profit agencies that can help with your credit report. That’s us! We can pull your report for you, and then take time to walk you through it, educate you on what it says and means, and then help you with an action plan to improve your credit report. We also usually have a fee for this service but at most, if we have to pull your report, it will cost you a whopping $35. We simply educate and empower you to do the rest for free. If you are looking to purchase a home and want to get your credit report cleaned up in preparation for a home loan, we do have a grant to cover the full cost of this appointment.

Being the technological culture that we are, there are also websites and apps to help you do that. The free services are a good start, but make sure you read closely as they don’t always give you what you may be expecting. Looking at my account information on CreditKarma, I wasn’t getting the full report that I got from Experian. Also, they offer a free credit score, but know that this isn’t the score that most lenders use in your loan application. I got my Trans Union and Vantage scores on CreditKarma. Most lenders however, use the FICO score that is not included in most free services. They will have slightly different criteria and even score ranges. While the free scores can be a good indicator to monitor your credit report, just know what you are actually looking at.

Your credit report truly has a daily impact on your life, whether it is the availability of credit or housing, employment, or the cost of your insurance. It is definitely worth the time to get your FREE report to review. Should you find something wrong, there is help available. You also have the ability and right to do everything possible to fix your credit report at the cost of ABSOLUTELY NOTHING!!!

Should your credit report still be struggling with only correct information, there is still help available. Our counselors have seen pretty much everything and can help you establish a plan to improve your credit report and resulting credit score. Where do you want to be in seven years? Items remain on your credit report for seven to ten years, so decisions then may be determined by what is being said right now. Make sure you know what is being said about you – you have the right and power to make sure it is the truth.
written by Breck Miller

One Response to The Mountainous Cost of Credit Repair

  1. Kathy says:

    Great post, Breck! Thanks for reminding me about checking my credit report regularly.

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