Few things can be as devastating as being turned down for a home loan because your credit score is simply too low to qualify for the mortgage. Similarly, it can be both an embarrassing and humbling experience to be declined from getting a car loan or any other kind of consumer credit because of a few negative items found on one’s credit report. Having worked for some time at a Law Firm specializing in credit repair, it was often these kinds of people that would come to us for help in “repairing” their credit.  The points and opinions expressed in this article are drawn primarily from my experience in working with these people.  Now then, let’s answer some questions about credit repair.

What is Credit Repair?

Sometimes referred to as credit restoration, credit repair is the process of legally improving one’s credit score by removing negative, inaccurate items found on one’s credit report. This can be accomplished thanks to legislation such as the Fair Credit Reporting Act. Methods used to remove these items range from contacting the creditors to disputing the negative items directly with the credit bureaus.

It is important to distinguish between credit repair and what I call “Credit Score Optimization” (CSO); credit repair is the process of  improving your score by removing negative items, whereas CSO is the process of improving your score by maximizing your positive items.

Should I hire a Credit Repair Professional?

This question is actually quite tricky. If you look around on the internet, you’ll find strong, valid arguments on both sides of the court. My honest opinion is that it depends. The truth is that yes, you can do everything that a credit repair firm does for you on your own, for free. There are a tremendous number of resources online which are available to consumers seeking to repair their own credit. People use this as an argument for why you shouldn’t use a credit repair company, because they are charging you ridiculous fees for a service that you can do on your own for free!

But by this same logic, you shouldn’t take your car to a mechanic, or your taxes to an accountant, because you can do it on your own for “free”!

I argue that repairing your own credit is not free, because it can take a considerable amount of your time; time which you could be spending doing other things. Honestly, in many cases I would suggest hiring a professional to do it for you because, in most cases, they know what they’re doing and can save you a tremendous amount of time.

For instance, I worked on a case for a Doctor. In his situation, he really didn’t have that much spare time that he could afford to spend looking at his credit reports and writing up dispute letters. In this case, his time was literally worth much more than the rates we charged for credit repair.

What’s next?

Tomorrow, we’ll discuss how to spot scam artists posing as Credit Repair Professionals as well as discussing what kinds of things can and can’t be accomplished through credit repair.