Credit Repair Services: Something for Everyone

There is a lot more to credit repair than disputing negative items with the credit bureaus. Depending on your unique situation, achieving that ideal credit score may also require using a variety of other credit repair methods.

For this reason, many credit repair companies also provide a variety of different credit repair services to their customers. What follows are some of the credit repair services offered by credit repair companies. Note that not all companies offer each of these services which is another reason why there is no single best credit repair company for everyone. It all comes down to your individual needs.

Credit Bureau Disputes

Almost every credit repair company provides credit bureau disputes and some company's entire credit repair service is limited to credit bureau disputes.

Credit bureau disputes are communications sent to the credit bureaus requesting that they verify the accuracy of an item in your credit report. As stated in the Fair Credit Reporting Act, upon receiving a dispute, the credit bureaus have 30 days to perform an investigation to prove the validity of the listing. At a minimum, this investigation should include contacting the creditor reporting the negative item to get confirmation that the item is being reported correctly. If the credit bureau is unable to verify that the negative item is correct within the allotted time, they are required to correct or remove the listing.

Also, note that the credit bureaus are not required to investigate every dispute. The Fair Credit Reporting Act gives them the ability to reject and disputes that are frivolous or irrelevant, although it does not define those terms. This is why people often times see better results using a credit repair service than working to repair their credit themselves because credit repair companies have experience making sure your disputes are not rejected.

Creditor Interventions

When credit bureau disputes are not effective, for example if the creditor responds to the credit bureau stating that the listing is accurate, then it becomes necessary to go around the credit bureaus and work directly with your creditors. While credit bureau disputes may be all that is needed for some people to clean up their credit reports, many people see greater success when going with a company that also provides creditor interventions as part of their credit repair service.

Creditor interventions include a few different types of communications to your creditors ranging from goodwill interventions to more confrontational debt validation requests usually targeted towards collections agencies, but each have the goal of getting your creditors to stop reporting negative items to the credit bureaus.

An advantage that creditor interventions have over credit bureau disputes is that you may be able to get creditors to remove from your credit reports negative items that are 100% accurate. Remember, just because there is a time limit on how long negative items can stay on your credit reports (7 years in most cases), there is no minimum time a negative item must be listed. Regardless of how old a negative listing is, your creditors are able to remove it.

Debt Negotiation

While debt negotiation isn't typically associated with credit improvement (credit counseling and debt settlement services often times destroy people's credit rating), in some circumstances, debt negotiation can be a valuable credit repair service.

When people have debts that are past due, there is point in removing the negative listings from their credit reports if they are just going to be replaced by new delinquencies. Debt negotiation attempts to address the root of the problem by helping decrease or restructure your debts so you can get back on top of them.

As a credit repair tool, debt negotiation may also help increase your credit score through what is known as a payment for deletion. When this happens, the creditor agrees to remove the past negative items from your credit report as a term of the negotiation process.

Credit Score Coaching

Achieving a good credit score sometimes requires more than removing the negative items from your credit reports, and in cases where not all negative items can be removed, it may be necessary to do what is possible to make your credit score as good as it can be despite the negative listings.

Companies that offer credit score coaching as part of their credit repair service help customers work to optimize their scores by providing advice regarding the management of their credit accounts. Because your credit score also takes into account utilization ratios, debt to equity ratios, and your credit mix, a lot can be done to improve your credit score by making sure your credit profile fits what the credit scoring model interprets and belonging to a credit worthy individual.

Building Credit

Sometimes, even with a perfectly clean credit report, your credit score won't be as good as you'd like it to be. The credit scoring model looks at positive credit as well so you'll need to show a history of responsible credit management.

To help people build positive credit, especially in the case of newer credit users, credit repair companies may enroll you in certain stored value cards programs or other credit building tools as part of their credit repair service.

Seasoned Tradelines

Seasoned tradelines are a way of adding positive credit to your credit reports, but the difference is enough that it deserves a category separate from regular credit building. With seasoned tradelines, you are taking advantage of the authorized user element of the credit scoring model that is often times used by parents to help children build their credit.

When someone has a credit account, like a credit card, which is in good standing with a long history, it helps their credit score. If they add you as an authorized used on that account, that positive credit history shows up on your credit report and benefits your credit score.

The few companies that offer seasoned tradelines as a credit repair service, have a stable of people with good credit accounts that, for a fee, are willing to add someone as an authorized user. You pay to be that authorized user and the credit repair company, who acts as the middle man, brokers the deal and takes a cut.

Seasoned tradelines have come under fire because many believe they are an abuse of the authorized user element of the credit scoring model and serve to improperly inflate people's credit scores. Some have even made a case for purchased seasoned tradelines being illegal. Because of all this, the newest FICO scoring models have made attempts to limit the effectiveness of seasoned tradelines by distinguishing traditional authorized user accounts from those that are purchased for the purpose of increasing a credit score; however, new models face slow adoption so seasoned tradelines can still be effective for some.

New Credit File

Help creating a new credit file is still offered as a credit repair service in the dark alleys of the credit repair community, but it is a service that should be avoided entirely.

Using file segregation techniques, credit repair clinics claim to be able to trick the credit bureaus into creating a new credit file for you using a different number in place of your Social Security Number. This results in you having two credit reports, one with all the negative listings from your credit history and one that is completely clean. From there, whenever you apply for credit, you use the fake Social Security number on the application so the creditor checks your new credit report instead of the old one. Aside from the fact that a blank credit report does not give you a good credit score (you would first have to spend a good deal of time building good credit), creating a new credit file is a very bad idea because it could get you into serious legal trouble. Not only is it illegal to falsify your Social Security number on a credit application, but participating in a file segregation scheme could also be cause for you to be charged with mail and wire fraud on state and federal levels.

Most people realize when something is too good to be true, but when faced with the prospect of 7 or 10 years of bad credit, people will get desperate and do desperate things. Believing you can start over with a new credit report and paying someone for the privilege is one of those things. Even though some people have pulled it off, attempting to create a new credit file is never worth the risk. Save your money and contact a legitimate credit repair company.

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