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Beware of Companies Promising Immediate Credit Repair

You have seen them all over the place. They advertise on television. You will hear them on the radio. They will send you junk mail. They’ll show up in ads all over the internet. Credit repair has become a big business. While there are a few agencies out there that really are interested I helping you repair your credit, most of them are just going to take your money and leave you with very little to show for it. You especially should be cautious of any that promise to immediate or near immediate improvement to your credit scores.

There is only one thing that will have a relatively immediate impact on your credit scores, and that one thing is to correct any erroneous negative information showing up on your credit report. That’s it. That is the only way.

There are a few significant factors that impact your credit score. They are your payment history, your outstanding loan balances, and the ratio of your current balances to all your available credit. Besides a significant inheritance coming in to pay down your credit balances, there is not much else you can do to quickly improve your credit score.

It’s a lot like weight loss fads. There are a lot of products and plans out there advertising that they will help you to lose weight instantly. In reality, the only way to really lose weight and keep it off takes time and hard work (diet and exercise). Fixing your credit is much the same. There are no quick fixes.

Having said that, I did mention that fixing errors can improve your credit right away.  If you are looking at improving your credit, you need to know what is on your credit report. You can order a free copy of your credit reports from Trans Union, Experion, and Equifax. They are the three major credit bureaus, and they can have different information from one another.

The first thing that you will want to look for are accounts that do not belong to you. You would be surprised how many errors are out there on credit reports.  If you find an account that you cannot account for, you will want to contact that credit bureau directly to have it removed.

The next thing you want to check for is incorrect payment history. Sometimes, one of your creditors may report that you made a payment late, when in fact it was made on time. If you find an error like this, the best way to handle it is to contact the creditor first. Make them aware of the error and ask them to report the correction to the credit bureaus. Usually this is a pretty easy open and shut solution. However, in the event you find yourself hitting a brick wall with the creditor, contact the credit bureau in writing and include as much documented proof of the error as you can. The credit bureau than has 30 days to investigate the claim and make a determination on it.

You also will want to look at errors in your credit balances. Remember that the creditors are not reporting information in real time. If you just made a $2000 payment on a credit card two weeks ago, it will not necessarily be reflected in your balance on the credit reports just yet.

What you are really looking for are significant balance reporting errors. You owe $4000 on your car, but the credit report says $40,000. That’s the kind of thing you want to get corrected.

The last thing you want to check for is unauthorized inquiries on your credit report. Each inquiry lowers your score a few points. It is nothing too significant, but if you have 12 inquiries that are in error, that can make a small dent in your credit score. If this happened, again, contact the credit bureau in writing to get the matter resolved.

Save your money and run away from any agency promising immediate improvements to your credit score. The first step on the road to improving your credit score is reviewing your credit report and correcting any errors.