Credit reports contain a number of details that are used by creditors and insurers to evaluate applications for credit and insurance respectively. In fact, prospective employers use the information, that is contained in the report, for the purpose of determining the candidate’s suitability for managerial jobs that requires the latter to shoulder a number of responsibilities. The information that is contained in the report is vital to the core, since it contains details regarding bankruptcies, foreclosures, inability to discharge obligations, or a practice of timely discharge of debt. A consumer who has been arrested or sued will definitely find this information documented in the report. Details like these help creditors evaluate the prudence of sanctioning a loan, since repayment history is generally the basis for determining the possibility of future default on loans. Moreover, it has been observed that bad credit and insurance claims are positively correlated. Hence, the question of instant credit repair assumes tremendous significance.
Instant credit repair refers to removing inaccurate negative information from the credit report. People who are denied loans or insurance on account of misstated information, say bankruptcies or foreclosures or other unsavory details, will find it difficult to avail the same on account of dubious credit worthiness. For instance, bankruptcies and foreclosures will result in the consumer’s credit score declining by as much as 350 – 400 points. People are entitled to have the incorrect information erased from their credit report so that their credit rating can be restored.
How Does it Work?
Independent credit reporting agencies that offer rapid re-scoring, provide consumers the facility of receiving the rectified credit report within 72 hours by establishing a working relationship with the credit bureaus, viz., Equifax, Experian, and TransUnion, and the creditors. Creditors are expected to acknowledge, in writing, that the consumer’s credit report contains error(s). Once the credit re-scorers have adequate proof, they pass it on to the credit bureaus who in turn investigate the claim. In other words, the credit repair companies act as middlemen between the consumer and the credit bureaus. Consumers have the option of repairing their credit report without relying on the services of a middleman. This option is sometimes preferred, since re-scorers charge a fee that one can dispense with if one decides to forgo the services of the middleman.
Self-help – the Best Help
A consumer is entitled to a free credit report from each of the nationwide consumer reporting companies, viz. Equifax, Experian and TransUnion, in the following situations:
- According to the Fair Credit Reporting Act (FCRA), each of the nationwide consumer reporting agencies have to provide the consumers with a free copy of their credit report once a year.
- If the consumer is denied employment, credit, or insurance on the basis of the information in the credit report, he/she is entitled to demand a free report within 60 days of receiving the notice of action.
- People, who are unemployed and are planning to look for a job within the ensuing 60 days and those on welfare, are also entitled to a free copy of the credit report.
- Consumers who suspect that inaccuracies in their credit report is because of fraud and/or identity theft.
These consumer reporting companies have a centralized website, a toll-free telephone number and a mailing address so that the consumers can order their credit report without any hassles. The credit report is processed and mailed within 15 days of placing the order.
The notice of action will provide the consumer with the name, address, and phone number of the consumer reporting company. The consumer can then enclose a copy of the report and copies of the documents to support the claim and dispatch the same along with a letter to the credit reporting company. The credit reporting company is expected to investigate the matter within 30 days of receiving the request.
Hopefully, the above article would have dispelled some myths about irreparable credit, instant repair, and report rectification. Instant credit repair may sometimes be inevitable, since one may be unwilling or unable to wait for a month for getting the report rectified. It behooves the consumer to note that companies, that offer rapid rescoring, work with mortgage lenders and brokers. Hence, the credibility of a company that offers instant credit repair directly to the consumers is doubtful.