Is it possible to pay to remove a bad credit report?

Having a poor credit score is something that can work against you more than once and in more than one way. And it is that, those who do not have a good or fair score usually have Difficulty getting new credit cards and even getting approved for a personal loan. Of course, this is not always the case. There are moderately lucky people with bad credit who get that bank loan they need. The bad? In most cases, they could end up paying a much higher interest rate than normal.

Would these be the only consequences of having a bad credit score? Unfortunately not. A poor credit score could also affect the amount of security deposits that must be delivered in order to enjoy certain services, such as cable television or cell phones. And these are just a couple of examples from everyday life. Some citizens have reported difficulties in finding employment or even sign a good rental contract.

If your credit score isn’t as good as you’d like and you’ve experienced some of these situations yourself, you may have thought of a well-known tactic: pay someone to rebuild your score. And although it is not impossible, you should think twice before doing it. While anyone can pay to have a bad credit report removed, it’s not necessarily the best option..

What does it mean to pay to remove a bad credit report?

First of all, anyone who wants to get a good credit score needs to know what it means to pay for it. According Paul T Josephattorney, CPA, and founder of Joseph & Joseph Tax and Payroll in Williamston, Mich., paying to remove a bad credit report is, essentially, when a creditor contacts the debtor or vice versa to agree on the payment of part or all of the outstanding balance.

This is how 1) the debtor agrees to pay off the debt and, 2) the creditor agrees to contact the credit agency to delete any negative comments of your report.

If you are interested in this method, you must formalize the agreement by sending a letter to your creditor that contains the following:

  • Your full name and home address.
  • The name and address of the creditor or collection agency.
  • The name and number of the account or debt to which you refer.
  • A written statement stating how much you agree to pay and what you expect to get from the creditor, i.e. remove the negative note.

In other words, all you’re doing here is ask your lender to retract any negative comments they have added to your credit report. This may include late payments, arrears, among others. By paying off some or all of your outstanding balance, you’re hoping that this lender you’ve contacted will show you his goodwill and remove the notes that are causing your score to drop.

Note: Consumers have the right to sue credit bureaus (such as equifaxTransUnion and Experian) and to creditors when they report inaccurate information that, once properly disputed, is not investigated or removed.

Is it legal to pay to remove a bad credit report?

The Fair Credit Reporting Act (FCRA) governs the legal scope of credit reports. Anything a debt collector, creditor or collection agency does with respect to your credit report must comply with the rule. So says Joseph P. McClelland, a consumer credit attorney in Decatur, Georgia.

Taking this into account, it is important to reaffirm that credit bureaus must submit accurate credit reports and, therefore, consumers have the right to sue creditors or the very agencies in cases where this is not the case. Specifically, this includes when the report continues to show inaccurate data—possibly negative—even after a consumer has raised a justified dispute that the credit bureau chose not to investigate.

But, back on topic. No, technically paying to remove a bad credit report is not expressly prohibited by the FCRA. However, this should not be seen as an escape ticket. He thinks that, as McClelland asserts, the only data that can be deleted from your report are those that present inaccurate or incomplete information. Any deletion or modification of a note other than this will be at the discretion of the collector or creditor.

So how do you remove collection accounts from a credit report?

The success of your attempt to pay to remove a bad note from your credit report will depend on who you deal with. For example, the debt collector may try to cut a deal with you by saying that if you pay all or part of the debt, then they will discharge it. This is completely legal under the FCRA. However, you cannot sing “victory” yet. And it is that, collection agencies and third-party collectors cannot modify a note sent by the original creditor.

It is best, in this case, that you put this agreement in writing and know the risks. Remember that if the note does not disappear and you decide to pay the original lender a visit, the lender may refuse to modify it, stating that the sales contract they signed with the collection agency prevents them from making any changes or updates to the note. In this scenario, the best thing that can happen is that it is the same collection agency that asks the main creditor to modify the information, but keep in mind that this does not happen in all cases.

Tip: At this point you may think that it is better to try another option to get back to a good score. An advice? You could opt for a credit repair.

Eliminate a bad credit report with credit repair

Hiring a credit repair company is another option you have to pay and thus eliminate any wrong information that is causing you problems. Credit repair agencies have a service that contacts the bureau directly and submits objections about errors contained in the report. This is done if the information is false or incorrect. In this case, you won’t necessarily have to pay an outstanding balance: just the company fees which are usually $30 to $100 per month.

Note: The credit repair company fee is usually divided into two types: an initial fee and a monthly service fee. The initial one can vary between $10 and $100, while the monthly one ranges between $30 and $100 per month. However, note that some companies may charge even more than this.

Tip: Consider these fees first and see if what you will receive in return is worth it. To give you an idea, according to the Federal Trade Commission, credit repair companies can’t legally do anything for your score that you can’t do for yourself.

In fact, you can repair your credit report on your own by carefully reviewing the information to see if you find any negative notes that are wrong. After you identify inaccurate comments, you’ll need to initiate a dispute and have the credit bureau investigate the note for removal.

When is a credit repair company useful?

However, what a credit repair company can do is save you time. We recommend that you ask for several quotes before hiring one and that you investigate them very well to verify that they have a good reputation. According to experts, most credit repair agencies are legitimate, but there are some that make too good promises to be true or still use methods not authorized by the FCRA. In that case, it would be preferable to choose another company so as not to get into trouble and, of course, not lose your money.

Remember: Most negative notes impact your credit rating early on. This could also help you determine how advantageous it would be for you to use a credit bureau. And it is that, if the note is very old, it is possible that the negative impact that the comment had has already passed. That’s mainly because late payment or collection account information can stay on your report for up to seven years. In the case of bankruptcy notices, they usually have a duration of up to 10 years.

How to repair credit on your own?

Do not hire anyone and opt for repair credit on your own is perfectly valid and here we will tell you, in broad strokes, how to do it:

  • Review your credit reports with a magnifying glass and mark negative notes that are inaccurate or false. File a dispute for each of the errors through the website of the major credit bureaus. Can get a copy of your report here.
  • Also consider asking a trusted person with stellar credit to add you as an authorized user on one of their cards.. Your good credit history can help you add a few points to your score.
  • Find out what cards and lines of credit you can access to build credit and consider asking your landlord to report house payments to major agencies across the country.
  • Get in the habit of paying your bills on time.. Remember that payment history has the most significant impact on credit scores.
  • Consider the pros and cons of settling some of your accounts. Of course, do this after you assess the impact this would have on credit limits and your utilization rate.

In short, can you pay to remove a bad credit report?

Broadly speaking, yes. Paying to remove those notes that prevent you from having a stellar credit score is possible. But how do you do it? Contacting the creditor and reaching an agreement with him. This kind of deal is simple: the debtor agrees to pay all or part of the debt so that the creditor removes the negative note from his report.

Another way to do this is to pay an expert credit repair company. In this case, you would be giving money to a specialized company to contact the credit agency and point out all the errors that your report presents, that is, false or incorrect data. By doing this, you are also prompting them to delete inaccurate negative notes. This would cause the score to recalculate and be as shiny as before.

Now, is it worth paying for a credit repair? It depends. Remember that this is a simple – albeit tedious – procedure that you could do yourself. If you don’t have the time, it would be best to hire an expert; but -if you have it- you could decide to carry out the procedure on your own with our credit repair guide.

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