Frequently Asked Questions About Credit Repair

Here are some common questions about credit repair.

Is it legal to repair bad credit?

The Fair Credit Reporting Act gives consumers the right to dispute negative items listed inaccurately on their credit report. When you file a dispute with the credit bureaus, they are required to investigate the accuracy of the disputed item, and if they are unable to verify it, the item must be deleted from your report.

How long does credit repair take?

This depends upon the approach. If you are doing it yourself, it depends on how much time you have available to devote to the problem. If you hire a credit repair service, most will tell you anywhere from 45 to 60 days, and possibly more, depending on your situation.

Why should I bother trying to repair my credit?

The main reason is that a better credit score provides you with a better interest rate on any kind of borrowing situation: credit cards, home loans, vehicle loans. Many insurance companies and some employers base their rates or offers on your credit report as well.

How long does negative information usually remain on my credit report?

Most negative information will remain on your credit report for seven years, but some (such as a bankruptcy filing) may remain for ten. Some of the items that can remain for seven years include: judgments obtained against you; tax liens that have been paid; any accounts that were sent to collections; late payments; unpaid and overdue child support; and criminal records (criminal convictions may be reported forever).

Are credit repair companies just scammers?

Some are, some aren't. It's always best to do your homework before hiring anyone to perform a service for you.

What is a "charge off"?

When you haven't paid on a debt, a creditor will list it as a "charge off" on your credit report. This means the creditor has given up on being paid, and is taking the debt as a loss on their taxes. The creditor may sell the debt to a collection agency, or just let it go, if it isn't very significant. A charge off is negative and will count against your credit score. Even worse, if the account is sold to a collector, the collector can also report it as an unpaid debt, which will negatively impact your credit score as well.

Should I repair my credit before I get married?

Absolutely. Once you get married, your spouse's credit score will affect you, and vice versa. If one of you is having credit problems, this could be a problem for you both.

Will it help if I pay off old unpaid debts?

Not necessarily. You may need to consult with an attorney or a credit repair company to determine whether this would help or harm your credit score.