What Is Credit Restoration? 7 Strategies Explained

February 4, 2021

What Is Credit Restoration? When discussing credit restoration, you’ll want to start by understanding credit reports and why a credit repair service will want to see yours before beginning the restoration process. Credit reports provide lenders, such as banks and other financial companies, with crucial information regarding your credit history. Many businesses use a credit report to decide if you’re a trustworthy applicant for the loan or service they provide. 

Your credit report also provides you with a credit score. If you’re planning on renting an apartment, buying a car or a house, or considering any other large purchases, you may want to improve your credit score to help you secure a lower interest rate. This is where credit counseling and credit restoration come into play. 

Luckily, there are ways to repair and improve your credit score. Credit restoration can be achieved by correcting negative items on your report and building a better credit history. In this article, you’ll learn practical strategies to restore your credit score.

What Does Credit Restoration Mean?

Credit restoration is the act of working toward a better credit history. There are many methods ranging from disputing claims with the help of a credit counselor to correcting damage left by identity theft. Even though there are many steps you can take to repair your credit, it can take time to see results. 

Keep in mind that filing disputes for inaccurate information on your credit report and reporting fraudulent claims only go so far. Although, if successful, these methods help your credit score, you’ll also want to work on improving other factors, such as on-time payment history, in building your credit score.

What Do Credit Restoration Companies Do?

It can be challenging to identify why your credit score is suffering and how you can combat it, which is why there are credit repair companies. At Credit Saint, we’re dedicated to helping you understand your credit so that you can protect yourself from credit issues. Understanding what contributes to your credit score and how you can take proactive steps to improve your credit is one of our priorities. Continue reading to learn how credit restoration companies can help you restore your credit.

Collections

One approach that credit restoration companies take is focusing on collection accounts. When a lender needs you to settle a debt, they will try to contact you and alert one or all of the three top credit bureaus — Equifax, TransUnion, and Experian — that they’re attempting to collect payment.

Collectors send payment notices to the address they have on file or sometimes even by phone. Once you receive the first bill, you’ll have up to 30 days to request validation for the debt, according to the Federal Trade Commission. By requesting this information, the collector must give you proof of the debt you owe. This type of debt is one of the worst to have because it shows that you’ve avoided this debt for quite some time. 

Credit restoration companies, like Credit Saint, can offer advice when it comes to dealing with collection agencies. In some cases, they might recommend sending a goodwill request, in which you ask the original creditor to remove the late payments. Removing a collections account from your credit history can be difficult and take some time, which is why it’s a smart idea to get advice from the pros. 

Charge-Offs

A “charge-off” occurs when a lender closes your account when there is a debt due. The lender marks your account as a loss. Once the debt has been paid off, the status will change from “charge-off” to “paid charge-off.” This type of debt can linger for up to seven years since the date of first delinquency. 

Removing this type of debt from your record can be very challenging. However, you do have options to help build and restore your credit:

  • Contact a reputable credit restoration company to dispute with the creditor or lender
  • Dispute any errors incorrectly reported or weren’t yours. The credit bureau must remove or further investigate disputed errors from your report.. For this reason, it’s important to ensure that you’re managing this situation properly.
  • Before you send in a payment, try to negotiate the best payment amount you can.  Creditors generally will not allow “pay-for-delete” terms, so do not withhold settlement if they will not offer you “pay-for-delete”.  The paid charge-off status is still an upgrade to the normal “charge-off” status.

Mortgage Correction and Derogatories

If you missed your payment due date for your mortgage, your credit score could suffer. Since the implications of paying your mortgage late can be harsh, it’s important that you address the delinquency as quickly as possible. In some cases, you may be able to have the mortgage late payment taken out from your credit history, but getting there can be challenging. To avoid high mortgage rates and a drastically lower credit score, working with a credit repair company can help you dispute the claim or remove it from your credit report if you feel it’s inaccurate.

Late Payments

Even one late payment can devastate your credit score, having a history of repeated late payments can have serious repercussions. Credit repair companies can help you dispute inaccurate late payments, with the goal of removal. 

If inaccurate late payments are confirmed by the credit bureaus, they should be removed from your credit history.

Bankruptcy

Although bankruptcy can greatly impact your credit score, it’s not the end of the world. It can take years to fix and rebuild it to what it once was. However, working with a credit restoration company can help you fix your credit report.  

Even though credit restoration companies can’t remove debt from your account, they can help you challenge incorrect claims. Managing the ongoing implications of bankruptcy can be challenging, which is why turning to the right people can help you uncover erroneous reports and fix your credit. 

Identity Theft

Having your identity stolen and your credit history damaged can require a lot of repair work. Working with a credit repair company can help you handle the financial issues associated with a stolen identity. For instance, at Credit Saint, we’ll help fight to have inaccurate information removed from your credit history without the stress.  

Do Credit Restoration Services Really Work?

Credit restoration companies make it their mission to correct credit reports. At Credit Saint, we work with credit every day and help eliminate some of the hassles of repairing your credit and building a better future. If there is inaccurate information reported on your credit report, you have the right to report it. We’ll help identify and report any inaccuracies, erroneous charges, and other factors that can impact your credit report. 

In the following sections, we’ll review some of the steps that credit restoration companies should use to repair your credit. 

Strategy 1: Dispute and Remove Errors

First, credit restoration companies will identify and challenge any errors in the report. According to the Fair Credit Reporting Act (FCRA), credit reports should be accurate and fair. For this reason, you have the right to dispute fraudulent or inaccurate claims.  

Sometimes, accounts have incorrect information associated with them, such as an erroneous late report. If this is the case, a credit restoration company will dispute the claim with the goal of removing it from your credit history.

Strategy 2: Analyze Your Credit Score

Credit repair companies will also analyze your credit score and show you ways to improve it. As mentioned, a credit report includes a credit score. The credit score is based on a formula, which considers:

  • Length of credit history 
  • Past and present credit accounts 
  • Type of credit account (e.g., installment, revolving, mortgage) 
  • Payment history 
  • Account balance 

There are two primary types of credit score measurement: FICO score and VantageScore. Credit scores range from 300 to 850; however, the classifications of these scores vary. Even though there are differences between their classifications, higher scores indicate a lower level of risk. 

Many financial institutions use the FICO score to classify credit scores:

Exceptional 800-850
Very Good 740-799
Good 670-739
Fair 580-669
Poor Under 580

Strategy 3: Intervene With Creditors

Working with a reputable credit restoration company can help to fix your credit in especially challenging cases. For instance, credit restoration companies sometimes challenge directly with your creditors.

Strategy 4: Track Your Score

Improving your credit score may take some time. Tracking your progress can help ensure that your score is improving and help identify inaccuracies. Credit repair companies look for strange changes to your credit score, which can include new accounts and outstanding balances. 

Strategy 5: Use Inquiry Targeting

Even though tracking your credit score is important, inquiries can have an impact on your credit report. When a lender requests your credit report, they will see hard inquiries, which can only be made with your permission. Too many inquiries within a short period reflect poorly on your creditworthiness. On the other hand, soft inquiries don’t negatively impact your creditworthiness. Credit restoration companies use inquiry targeting to make sure the inquiries you have are ones you requested. 

Strategy 6: Utilize Experian Monitoring

Additionally, many credit restoration companies use Experian monitoring to help prevent inaccurate charges in the first place. Experian helps individuals identify fraud quickly so that they can avoid erroneous charges. Credit repair companies, like Credit Squad, should be monitoring your credit report with Experian to prevent identity theft and other issues. 

Strategy 7: Send Cease-and-Desist Letters

Moreover, credit repair companies can issue cease-and-desist letters to creditors. Under the Federal Trade Commission’s (FTC) Fair Debt Collection Practices Act, debt collectors are legally required to stop harassing you under certain circumstances. To cease communication, the debt collector must have a written notice that says that you (the customer) don’t want to have any more communication. 

How Much Does Credit Repair Cost?

Fixing your credit doesn’t have to cost a fortune. Our goal is to help you better understand your credit and repair your credit in as little time as possible. We handle various issues that can impact your credit record, which is why we offer a variety of packages for your unique needs. 

Credit Polish (Medium Aggressiveness)

The Credit Polish package is best for individuals needing a relatively aggressive approach. It’s best for those who need to repair their credit but don’t require our most aggressive packages. For $79.99 per month, you can have professionals analyze your credit score, intervene with creditors, track your score, and challenge the three credit bureaus. 

Credit Remodel (High Aggressiveness)

For those needing a more aggressive approach to credit repair, we have the Credit Remodel. This package includes work associated with disputing up to 10 erroneous items per dispute cycle. For $99.99 per month, you can have professionals analyze your credit score, intervene with creditors, track your score, perform target inquiry and Experian monitoring, and challenge the three credit bureaus. 

Clean Slate (Very High Aggressiveness)

The Clean Slate package is best for those needing the most aggressive approach. For $119.99 per month, you can have a team of professionals working to repair your credit. Highly trained professionals will analyze your credit score, intervene with creditors, track your score, perform target inquiry and Experian monitoring, challenge the three credit bureaus, and send cease-and-desist letters. This package also includes work associated with disputing up to an unlimited number of erroneous items per dispute cycle.

Credit Saint Can Help You Restore Your Credit Report

Whether you plan to rent an apartment or buy a home, a good credit score is essential to getting the best deals. Not everything in life goes to plan, which is why we’ve developed a system to help. Our credit restoration packages were designed to help a variety of individuals with unique needs. Credit restoration can help you rebuild your credit so that you can move forward. 

Credit Restoration FAQs

How Do You Spot a Credit Restoration Scam?

According to the Consumer Financial Protection Bureau (CFPB), there are several things to look out for regarding a credit restoration scam:

  • They demand payments upfront. If the credit restoration company demands upfront payment, this is a red flag. 
  • They make exceptional promises. If they tell you that they can remove the bad credit card information overnight or other too-good-to-be-true scenarios, you should avoid working with them.
  • They provide misinformation. If the company doesn’t tell you of your rights and the price upfront, you should avoid them. 

How Much Does Credit Restoration Cost?

The price of credit restoration varies depending on your needs. Credit Saint offers packages starting at $79.99 per month. 

Is It Worth Paying a Credit Repair Company to Fix Your Credit?</h3>

Credit repair companies can help you dispute errors on your credit report. In many instances, working with a credit repair company can offer the knowledge and attention to detail necessary to update credit errors with the credit bureaus. At Credit Saint, we have a team of knowledgeable individuals dedicated to advocating for you.