5 Reasons To Use Professional Credit Repair Services

United States Public Interest Research Group reported that over 70-80% of Americans have inaccurate and/or negative items reported on their credit reports. This costs consumers millions of extra dollars in increased interest rates each year. Compared to this, the cost of hiring a credit repair specialist will seem like nothing. - October 2006

You recently applied for credit; a mortgage, a car loan, a credit card and you were turned down. The rejection causes a myriad of emotional responses - disappointment, guilt, shame, shock and denial. It also causes us to ask why? Why was my application for credit denied?

The answer can be found in your credit report. Perhaps you are over-extended. You have reached the limit of your credit boundary. This happens when your debt-to-income ration has exceeded the limits of the credit grantor. This is reflected in your credit report when the credit grantor makes an inquiry. Denial of credit based on this type of inquiry, known as a "hard inquiry" can lower your credit score, especially if you've made multiple requests in a short period of time and were repeatedly rejected.

If you are not overextended the cause could be any number of negative items reported on your credit bureau profile. This might include, late payments, charge-offs, delinquent accounts, collection accounts, liens, judgments, bankruptcies or foreclosures.

Regardless of the cause of the rejection, it's important that you obtain copies of your credit reports from the three major credit bureaus; TransUnion, Equifax and Experian.

Otherwise you will never be sure as to why your credit application was rejected.

There is a proliferation of information in the media today of information on how to monitor, fix and improve individual credit. Much of this information is a result of consumers increasing reliance on credit cards to pay for everyday items including food, gas and even shelter.

Even with the available information on why and how to do it, over 70 million Americans have at lease one negative item on their credit reports. Most Americans do not even check their credit reports, even though they are entitled to a FREE Annual Credit Report from the credit bureaus.

FTC Testifies on Credit Reports

Lydia Parnes, Director of the FTC's Bureau of Consumer Protection, described the FTC's progress toward these goals, including enforcing the Fair and Accurate Credit Transactions Act of 2003 (FACTA) and the Fair Credit Reporting Act.

The testimony noted several significant FTC enforcement actions, including cases in which the three principal nationwide CRA's (Equifax, Experian and TransUnion) agreed to pay a total of $2.5 million in civil penalties for allegedly failing to maintain adequate personnel to respond to consumers registering disputes, and a case against Far West Credit, a Utah-based CRA that agreed to pay $120,000 in civil penalties for allegedly failing to use reasonable procedures to ensure accuracy of information in consumer reports.

Why is this norm and not the exception to the rule? Procrastination is in large part the reason. Most people do not think about their credit score until they are turned down for credit. And then it is often too late.

5 Reasons To Use A Professional Credit Repair Company

Reason #1 - Time

Time or the lack of it is one of the top reasons that most do-it-yourselfers fail when it comes to repairing their credit. It takes time to select, prepare, send and follow-up on the dispute correspondence to not one, but all three credit reporting agencies. With our busy schedules, most people don't have the time to dedicate to the process.

In addition to the initial dispute letters that you send, there are follow-up letters that might have to be sent for no-replies or to the credit reporting agencies when they fail to remove negative items.

Credit repair is a process, not a magic bullet. It can from 90 days to several months to remove negative or erroneous information. And remember, the credit reporting agencies are not your friend. They are paid by your creditors to report negative information. They have no incentive to help you.

Reason #2 - Knowledge

If you don't know your rights you have none! Knowledge is power. According to the FTC, credit bureaus are the number one source of consumer complaints in America. Bankruptcies and foreclosures are at an all time high, and millions of Americans find themselves unable to qualify for credit. Worse yet, they are then punished for the next 7-10 years of their life. The thing that most of these people don't realize is that "No part of Constitutional Law states that your bad credit must stay on your record that long. That is just credit bureau corporate policy.

Reason #3 - Resources

In addition to Time and Knowledge, you need the proper Resources in order to successfully repair your credit report. These resources include the right letters, not just a set of "Boiler Plate" credit repair letters. Credit bureaus frown on these template letters that often do not correctly address the item being disputed. In order to be effective the letters must be updated and customized to suit each individual type of dispute - late payments, judgments, bankruptcies, charge offs, tax liens, student loans, and much more. Also you will need follow-up letters to insure that your contested items are permanently removed.

Also, you will have to learn how to negotiate with creditors. Most people don't know that debt can be negotiated down to as little as 20 to 30 cents on the dollar.

Reason #4 - Accountability

Who do you hold accountable when you don't follow-up on the things you've promised to do? When you pay for a service, you can hold the service provider accountable to what they've said they are going to do. Why? Under the law a reputable Credit Repair company must provide you with a detailed contract of the services they will provide. It's the law!

Reason #5 - Cost

What is the cost of doing nothing? Thousands of dollars in higher interest payments or worse yet, missed opportunities because you did not qualify for credit for a mortgage, auto loan, student loan, or credit card.

The cost of using a professional Credit Repair service is negligible in comparison to the cost of not fixing your bad credit.

Credit Repair is nothing more than a dispute process. But you need to know how to dispute the credit bureau reports and how to make the disputes stick. The system is set up to make you feel like an outcast. You need to realize that the credit bureaus make their money off your misfortune.

Yes, you can Repair Your Credit Yourself. However, if after reading this article any of the "5 Reasons" apply to you, seek the help of a professional Credit Repair service.