There are many (far too many) credit repair companies and software products that promise immediate and unrealistic results. Their process may include sending repetitive letters to the credit bureaus to challenge valid information in the hopes that they will not be able to respond within the required time period (30 days) - and be forced to remove an item. Another unscrupulous method used by some is simply to challenge every negative item on a report whether valid or not - in the hopes of overwhelming the bureau with requests and then demanding removal.
While these processes are occasionally successful in the short run, they are NOT recommended. The credit bureaus are deluged with what they call "Frivolous Challenges" made by credit repair companies and consumers and are trained to spot them and respond immediately. If the bureau considers a dispute to be frivolous, they are not required to respond in the 30 day period. Remember, the bureaus aren't the enemy. They are in the business of tracking credit activity as accurately as possible and selling that information to lenders, banks and others. If the information is truly incorrect - they will remove it.
Here are a few things NOT to expect in and from the credit repair process:
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Removal of valid, legitimate items from your credit report - they will reappear later if they are valid.
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Removal of a bankruptcy record if less than 10 years old.
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Removal of public record items such as tax liens, garnishments or levies unless they are beyond the statute of reporting.
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Do not expect a new FICO score of 850 - very few people (if any) achieve this score, and it isn't necessary to be considered an "Excellent Credit" consumer.
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Do not expect the credit bureaus to respond immediately to your requests - they are swamped with such letters, but typically respond within the time allotted.
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Do not get discouraged because a credit file contains negative information... to learn more, see: How Mistakes are Made
Consider This
96% of credit files today contain errors, some of them are critical enough to lower a score by as much as 275 points. Focus on the incorrect information, don't waste your time on valid negative items. To put the problem and the opportunity into perspective, consider the following facts:
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29% of consumers have variances of more than 50 points in their credit score between the 3 bureaus (CFA/NCRA)
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60% of files had at least one account that showed different account type across the 3 bureaus (CFA/NCRA)
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78% of credit reports fail to report at least one revolving account in good standing (CFA/NCRA)
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10% of files omitted the date of fulfillment for a bankruptcy (CFA/NCRA)
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79% of reports contain serious errors or other mistakes of some kind (PIRG)
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96% of credit reports report inconsistent credit limits (CFA/NCRA)
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43% of credit files report a conflicting number of times that the same account has been reported 30 days late (CFA/NCRA)
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96% of credit reports show a different delinquency status, between 30 and 90 days delinquent, across the 3 bureaus (CFA/NCRA)
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33% of files are missing a mortgage account that’s never been late (CFA/NCRA)
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66% of files are missing an installment account that’s never been late (CFA/NCRA)
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25% of files contained contradictory information regarding the date of last activity (CFA/NCRA)
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70% of credit reports fail to report a credit limit for at least one account (FRB)
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22% of files show the same loan reporting twice or more (PIRG)
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20% of consumers are at risk of being mis-classified as sub-prime (CFA/NCRA)
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29% of credit reports contain errors serious enough to cause denial of credit (PIRG)
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82% of credit reports report different balances on the same revolving or collection account across the 3 bureaus (CFA/NCRA)
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CFA – Consumer Federation of America NCRA – Nation Credit Reporting Association PIRG – Public Interest Research Groups FRB – Federal Reserve Bulletin
With statistics like these - its likely that YOUR credit file also contains errors. To get additional information about these statistics and the companies that supplied them, check out these links;
The Public Interest Research Group (PRIG)
Consumer Federation of America
The National Credit Reporting Association
These not-for-profit organizations report on credit and credit related issues as they relate to the consumer. Take a moment to visit their websites - they're a really great source of information
