A poor credit report makes it difficult for a person to get a credit card, any loans or even rent an apartment, for that matter. This is where a credit repair specialist can help a consumer by improving his credit score and hence improving his chances as an applicant. They start by getting a copy of the client’s credit report from all the credit bureaus and then reviewing those reports for any negative or derogatory marks, mistakes or outdated information.
They will scan through all the reports to check for information that can be effectively deleted from the report, based on Fair Credit Reporting Act. Then they will suggest a set of options to deal with these negative items like paying off, disputing, settling, filing for bankruptcy, negotiating for removal of the negative item or waiting out the time limit in credit reporting, depending on the clients financial or credit goals. As per the Fair Credit Reporting Act majority of the negative marks can be reported in a credit account for a maximum of seven years.
If there are mistakes or outdated information in the report, it can be disputed right away by directly writing to the credit bureaus and the company furnishing the faulty information along with the appropriate document copies for validation. The credit bureaus have to investigate the dispute within 30 days of receiving the dispute and the result is to be sent within five days of completion.
Charge offs, Tax liens and bankruptcies reflected in the credit account can negatively affect credit worthiness. The specialist will assist the client in writing appropriate letter to the collection agencies, credit bureaus, credit companies as the case maybe.
In case of Charge Offs the debtor has to pay it off, settle it or discharge it in bankruptcy filing. There are three ways in which a charged off account may be paid.
First, if the original lender has not sold the account to a collection agency, the client can pay the loan back to the lender and request the lender to change account status to “Charge off paid” and update the account balance as nil.
Second option is to negotiate with either the original lender or the collection agency, as the case maybe, to settle for a lesser amount than originally agreed upon and ensure that the charge-off is shown as settled in the credit account.
Lastly, if the account has been sold to a collection agency by the original lender then the debtor has to pay to the collection agency and ensure that the charge is shown as “collection paid” in his credit account.
In short Credit specialist will analyze client’s present income, understand his expenses, examine the present debt situation, go through the credit reports with a fine-tooth comb and advise the client on the best way to hand the situation. They also advice the clients on how best to manage credit in future as well so that they land in the position.