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What is Credit Restoration and is It Ever Legitimate?

by Emilie Burke on
3/24/2022
in Using Credit
Two women in discussion

The following is presented for informational purposes only and is not intended as credit repair.

If you’re struggling to improve a low credit score, credit restoration can sound like a great option. But what is it and does it really work? Let’s take a look.

What is credit restoration?

Credit restoration is a way to “repair” or delete some of your bad credit history to improve your overall credit score. This is done by disputing the information on your credit report.

Through the Fair Credit Reporting Act (FCRA), you have the legal right to dispute any information on your report. Then, the credit reporting agencies and your creditors have 30 days to investigate and either verify it as correct or remove the disputed marks until they can be verified. 

If the disputed information is removed, either because it was legitimately incorrect, or because the reporting bureau needs more time to complete their investigation, then your credit score may improve, at least temporarily.

Does credit restoration work?

Well, yes and no.

If you have erroneous information on your credit report, then a credit restoration company may be able to help you remove it. And of course, if the erroneous information is causing your score to drop, then this would be a good thing.

But what if your credit report is correct and there are no errors? Then, depending on the company, they may go ahead and dispute the negative marks on your credit report anyway. And if the reporting agency isn’t able to verify the marks within 30 days, those marks will be removed – but only temporarily. Eventually, the reporting agency is going to complete the review, at which point the negative marks will be added back to your report.

Is credit restoration legitimate?

Companies that offer to help you remove incorrect information from your credit report are legitimate. Companies that promise to increase your credit score by falsely disputing valid marks on your report are not.

Credit restoration services, therefore, are legal, and if you’re not sure how to go about correcting the errors on your credit report, you may be tempted to hire a credit restoration company. The trouble with credit restoration services – even the legitimate ones – is that the services are usually expensive and almost always something you can do on your own. You’ll need to weigh the time, effort, and cost involved before deciding which course makes the most sense for you.

It bears repeating, however, that knowingly disputing accurate credit report information is a bad idea. If your credit is hurting right now, focus on making smart decisions that help you rebuild your credit over time. Past mistakes will impact your credit score less and less as time goes by, while most negative marks will disappear completely in seven years.

Credit hurt by missed payments? A debt management plan (DMP) may be able to help you save money with a more budget-friendly monthly payment. And better yet, there's no credit score requirement. Begin your free financial review online and see if a DMP could work for you.

Tagged in Build your credit score, Financial scams, Understanding your credit report

Emilie writes about overcoming debt, while balancing trying to eat healthy, stay fit, and have a little fun along the way. You can find more of her work at BurkeDoes.com.

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