Texas Credit Repair Laws

With many people rushing to make large purchases on homes and autos before interest rates rise any further, credit repair requests are rising, as well.

Banner image

With many people rushing to make large purchases on homes and autos before interest rates rise any further, credit repair requests are rising, as well. The reason for this is that in order to obtain a home or auto loan, one must first undergo a credit check. For many people, obtaining a home or auto loan may be the first time they’ve ever had someone examine their credit closely.

After a lender examines the credit report, they may determine that in the past, the borrower did not repay their debts in a timely manner or that their credit score is below a minimum threshold. However, maybe you do pay your debts in a timely manner, so why were you rejected? The answer might be inaccurate information on your credit report—this is where credit repair companies come to the rescue. Today, we’ll take a look at some facts about credit repair, and examine what laws the state of Texas has in regards to credit repair.

What Is Credit Repair, and How Does It Work?

Credit repair is the process of disputing and erasing inaccuracies on a person's credit report. If you’re having difficulty obtaining a loan, the goal may be to improve your overall credit profile and credit score. If you already have decent credit, the goal of credit repair is to improve your credit score so that you can obtain more favorable interest rates on your loans. 

While a person can dispute inaccuracies themselves, it is an extremely time-consuming process that involves waiting for hours on hold with the credit agencies, submitting documentation, and filling out piles of paperwork. 

Credit repair companies make this complicated process simple for the consumer. They will examine your credit report item by item to make sure everything is correct, and when an inaccuracy is found, they will dispute it with the proper agencies. Fees charged for these services are on a case-by-case basis depending how many items need to be disputed and the overall complexity of the case. However, the fees are often reasonable when you consider that on a $200,000 mortgage loan, having a credit score that enables you to lower your mortgage interest rate by even 1% will save you over $60,000 over the life of the loan.

Credit Repair in the State of Texas

Whether you’re seeking credit repair in Houston, Dallas, San Antonio, or Austin, the Lone Star State mostly adheres to the same laws as the Federal Government when it comes to credit reporting and repair laws. In the State of Texas, credit repair agencies are registered under what is known as Credit Service Organizations (CSOs) which can encompass companies offering all types of credit services. The basics are that all CSOs must register with the Secretary of State before providing services to Texas citizens. 

What Should I Look For in a Reputable Credit Repair Company?

When choosing a credit repair company, it's important to do your homework. While credit repair is absolutely a legitimate service, unfortunately, there are many unscrupulous companies and individuals that attempt to scam people out of money for services they cannot provide. Here are some common red flags to be aware of when searching for a credit repair company:

  • Companies promising to remove accurate negative items on your credit report

  • Promises to build you an entirely new credit profile

  • Companies telling you that no matter how bad your credit may be, they can get you approved for a loan—this typically involves pushing you to sign up for predatory loans 

  • Companies that guarantee they can repair your credit in twenty-four hours or less 

Basically, the rule of thumb is the same with any business deal—if it sounds too good to be true, it probably is. As mentioned above, a reputable credit repair company will examine your credit report with you to identify inaccuracies and help you to dispute those inaccuracies. They may also provide additional services such as credit counseling and tips to help improve your credit score overall. 

In Summary

Credit repair in Texas is much the same as it is in the rest of the country–just be on the lookout for companies that are making exaggerated promises. Do some research before choosing a credit repair company that can help you get your credit score back on track. Of course, The Phenix Group is here to help make your credit repair process a breeze.

We Fix Bad Credit

100% Free Consultation

Call Now