If you’re seeking credit repair services and you find a company or individual that offers to sweep your credit of all negative items, you should run the other direction.
In the world of loans and finance, there will always be unethical people that seek to scam people with false promises–a credit sweep is on that list of false promises.
In today’s article, we’ll examine if a credit sweep is legal, some facts about credit repair, and how the process works so that you can begin getting your credit back on track. Whether you’re seeking credit repair in Houston or anywhere else in Texas, the process is mostly the same.
First, let's explain why a person may need credit repair. Whenever you take out a loan or obtain a credit card, a report is sent to the American credit reporting agencies—Equifax, Transunion, and Experian. These credit reporting agencies will list each account that you have as well as your payment history for those accounts. Your payment history and credit profile go into a formula that creates a credit score ranging from 300 to 850.
Where credit repair comes in is when you have information on your credit report that is incorrect.Say Equifax shows that your car loan is still active when you actually paid it off two years ago, or there's a credit card account that someone with a similar name opened and it was accidentally added to your profile. Credit repair is the process of disputing these inaccuracies and getting them removed. While a person can dispute inaccuracies themselves, it is a time-consuming process–you need to speak with banks, creditors, and credit reporting agencies, then file documents and provide proof of finances. This arduous process can be made much simpler by hiring a reputable credit repair company, such as The Phenix Group.
The cost of credit repair varies on a case-by-case basis, depending on how many inaccuracies there are and how many items need to be examined. However, after the inaccuracies are removed, your credit score should rise, and this typically translates into lower interest rates on home and auto loans, as well as much better interest rates on credit cards. On a $200,000, thirty-year home loan, getting the interest rate lowered by 1% can save you $60,000 over the life of the loan—a fact that often makes the cost of credit repair seem reasonable.
Legitimate credit repair companies can only assist in removing inaccurate information from your credit repair—they cannot remove accurate items. Unscrupulous credit repair companies will make claims that they can wipe your credit clean and give you a brand new profile. This typically involves attempting a credit sweep or some kind of identity fraud.
A credit sweep is when the false credit repair company files a dispute for every single item on your credit report. Not only is this a huge waste of time, but it can also be illegal, as the only way to get certain types of accounts removed is by filing police reports stating that the account is not yours. Some credit repair companies may falsify a police report in your name in an attempt to get accurate accounts removed from your credit history. In the best case scenario, this is a giant waste of time; in the worst case scenario, you may find yourself in trouble with the law.
Avoid companies that make outlandish claims—anyone who says they can wave a magic wand and make accurate, negative items disappear is lying. Furthermore, some bad actors will promise to offer you a loan that everyone else has denied you—they’ll often attach this loan to a predatorily high interest rate that will be nearly impossible to pay off. As the old adage says, if it's too good to be true, it probably is.
Of course, professional, legal, and reliable credit repair experts at The Phenix Group are ready to help you with your credit repair needs today–we’ll take care of every step of the process involved in getting your credit score back on track.
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