It’s a good idea to want to know what a credit firm does to boost your FICO score from poor to desirable.
Undesirable credit is detrimental to your financial well-being if you live in the US which explains the emergence of credit repair firms. But with cases of fraudulent credit firms on the rise, consumers should be curious to understand the techniques credit repair firms use to improve credit status.
We sampled some of the common repair techniques to help you understand the most common techniques credit repair services provider use.
Credit Repair Techniques Companies Use
Here are the four ways credit firms help eliminate errors in your credit report.
- Re-aging the debt
The act of re-aging a debt involves correcting a debt’s date of last activity in a credit report to better its score.
A debt collector can easily make a mistake when writing the date of last activity on a debt. Changes should be made every time you make a payment towards a debt whether in full or in part.
The credit company follows up with the responsible parties to fix these errors.
- Writing an official Dispute Document to file claims
The credit firm writes an official dispute document and sends it to the responsible parties by mail or online.
The document explains the nature of the error and includes some proof to back up the claim.
After that, there are 3 possibilities;
Credit Bureaus will; (1) give a positive reply (a correction and a better score), or (2) a negative response (a disqualification notice for your request, and status remains the same) or (3) No response (automatic cancellation of the request, usually within a 30-day window.
You may not be familiar with this claim filing process, but an experienced firm knows exactly what to do.
- Eliminating time-barred debts
States have a statute of limitations on the time period a debt collector can follow a debtor to try collecting the debt or through a court case.
The time limit varies by state, but 3 to 6 years is common in many states, with possibilities of decade-long limits. After this period, the debt becomes “time-barred” and cannot be pursued in any way.
The credit repair firm follows up to confirm and eliminate all time-barred debts leading to a boost in your credit score.
- Opting You Out of the credit bureau system
The credit bureau system keeps track of all credit applications and credit disputes filed.
But many US citizens do not know one can opt-out of these systems that make it easy to track your debts and impact your score negatively. Credit fixing firms can help you opt-out of these systems to reduce the impact of debts in your score.
These are the approaches your service providers will use to improve credit your scores. Most of these things are difficult to do on your own, which explains the critical role of these service providers in our lives.