The Truth on Credit Restoration

Opposed to what most credit bureaus would prefer you to believe, credit restoration and repair does in fact work. This is, of course, provided you are getting the best advice and have an experienced professional working on your credit restoration.

Who Can Benefit From Credit Restoration

Any person with a credit score that is below 720 can benefit long-term from the information and advice available through credit restoration. However, there will be times when your personal limitations make sticking to this advice impossible. These two factors are your current financial situation and the time frame within you wish to reach your desired results. It is actually possible to remove anything from a credit report, including accurate items, if the creditor does not adhere to the law that outlines what needs to be done and within what time-frame. Having a certain type of account removed at one point in time does not mean other items are going to be able to be removed, even under the same circumstances. There is a hit-or-miss aspect which exists in credit restoration, because credit restoration depends not only on the strategies of the person trying to repair the credit, but also on the ineffectiveness or effectiveness of the creditors and credit bureaus in strictly following the laws. 

Why have I heard negative things about credit restoration?

Credit restoration has received a bad name due to the abundance of scam artists who take advantage of people desperate for this type of service. This unfortunately has lead the credit bureaus and the FTC to make untrue statements such as, credit repair does not work and there is nothing a credit restoration company can do that you can’t do for yourself. The credit bureaus and the FTC are forced to make bold statements like this given that more than 90% of credit restoration companies are scam artists.

Limitations of credit restoration

Limitations of credit restoration occur almost 100% of the time under certain situations. These situations make it almost impossible for a credit restoration service to help a person who is needing results within six months to a year. You must keep in mind that even when you can’t be helped immediately, the advice that can be given now can prevent you from making more mistakes in the future that could worsen your situation. Here are examples of certain situations where little can be done within a six to twelve month time period.

1. When more than 50% of the negative accounts which are showing on the credit report are listed as unpaid collections, charge-offs, foreclosures or repossessions and you do not have the money to pay the accounts off in full or settle them for a lesser amount. Due to the fact that the negative accounts remain unpaid, these items will simply reappear on your report once they are removed. Any negatives, even unpaid accounts, can be removed from the credit report. However, unless the negative account is brought current, paid in full or settled, it will simply reappear in 10-90 days.

  • The only way to prevent this is to bring the account current by paying the past due amount, or, in the case of a charge-off, collection, foreclosure or repossession, pay the balance in full or settle it for a lesser amount. Unpaid accounts that do not have this negative status require only that the past due balance be paid to be labeled current. Unless the negative account is a public record, the only way to keep it from being re-reported is to make sure the status is “current, paid, settled, transferred or sold.” 
  • Public records are the only negative items that do not need to be paid to prevent re-reporting. This is due to the fact that they are only reported once. Public records, such as unpaid judgments and tax liens, can remain unpaid and yet will not reappear once they are removed. In fact, the only time they reappear is when the initial reason for removal was the public record agency failing to respond the credit bureaus’ verification request with-in the 30 day period outlined by the Fair Credit Reporting Act, in which case the credit bureau would reinsert the public record if and when the public record agency responds to the credit bureaus after that 30 day period.

2. Credit restoration is almost impossible if you are unable to pay your minimum monthly payments and if you continue adding new late payments to your credit report.

In conclusion, it is possible for you to repair your credit if you hire a professional and listen to their advice. The effectiveness of the credit restoration will depend on the skill of the professional, your ability to adhere with their advice and also a little luck.

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