Rebuilding a Bad Credit Rating: Go it Alone or Get Help

If you have a bad credit rating, or even if there are just inaccuracies on one of your credit reports (you do have three – one with each of the major credit reporting companies) making the decision whether to try to repair your credit yourself and save money or hire an expert to help you is a tough call.

The law says that all consumers have the right to dispute mistakes on their credit report at no charge. This however takes time. Correcting just one error can take an individual hours.

After you find a mistake you have to find the evidence you need to back up your claim, write a letter to the credit bureau requesting removal of the offending entry, go to the post office and send the letter out by registered mail so that you have proof that you sent it and when.

And that’s not all. Then you’ll have to make a few follow-up calls to check whether or not the dispute has been addressed and settled. More than a couple of hours worth of work there.

How a Credit Repair Service Can Help

What a credit repair firm can do for you is take all of that grunt work off your hands. They can write the letters, they can follow up and they can do all the record keeping. and for some people that is a service worth paying for because they simply do not have the time to do it themselves.

That is about all a credit repair service can do at least as far as removals and changes to your credit report. No one can remove a legitimate entry from a credit report before time. There are no secret loopholes that allow you to “legally remove” a bankruptcy record from your report until the mandatory reporting time has passed.

What the best of these services can also do though is help walk you through the rest of the process of building credit. They can help you negotiate with difficult creditors. They may be able to help you come up with a better budget, or advise you on the best financial credit instruments – things like secured credit cards or small short-term loans – that may be great credit builders in your individual case.

How to Recognize a Good Credit Repair Firm

If you do decide that you need help building your credit, then you have to choose your credit repair firm very carefully as there are some bad apples out there.

All of the following are good signs that you are probably dealing with a legitimate credit repair service that is following the law and may prove to be very helpful to you:

  • Any UK Company that offers advice on debt or credit repair to a consumer must display an FCA Authorisation number on their website. This demonstrates that they are qualified to offer this service to consumers and are a legitimate, established and honest company.
  • If a company does not display an FCA Authorisation number on their website they could be trading illegally and if so they should not be used.
  • They tell you that you will not be charged until they have performed the requested and agreed upon services (this is mandated by law)
  • They tell you what you can do yourself for free to repair your credit
  • They tell you how approximately long it will take to achieve a positive result

All of this, plus a description of the exact services that they will be providing, should be put into a contract for you to sign by any legitimate credit repair service and it is only when you do that that the company can legally ask you for any form of payment.

Warning Signs That a Credit Repair Service is Up to No Good

Unfortunately, there are as many bad credit repair companies – bad as in they do lots of illegal things – as there are good ones. If any of the following is true in your dealings with a credit repair firm then you should not give dealing with them another thought:

  • They suggest disputing all the negative information on your credit report. You have every right to dispute mistakes but disputing a valid debt is fraud. The idea here is that by letting them flood the credit bureaus with appeal letters somehow one of two creditors will miss the 30-day response window and a valid negative debt will be removed by default and the credit repair firm will be perceived as having done their job.
  • These days though most debt is pretty easy for the credit bureaus to verify so the tactic rarely works. In addition, if a fraud were suspected you would be in trouble, not the dodgy credit repair service!
  • They promise you the moon. They cannot remove judgments, bankruptcies or any other similar records. There are no secret legal loopholes that work. They are just stringing you along until you hand your money over.