The Truth About Credit Repair
Credit repair is the systematic disputing of negative information on your credit report. By disputing information on your credit report, you can legally remove late payments, charge offs, judgments, tax liens, and bankruptcies from your credit report. The more negative information deleted from your credit report, the higher your credit score.
That’s because credit scores are based only on information from your credit report. Information like race, age, religion, residence and even your income are not part of your credit score.
So it’s possible that a Surgeon who makes a million dollars a year will have a lower credit score than a Teacher who makes $70,000 a year. When it comes to credit scores, income is not a factor. Again, the only information that affects your credit score is what's on your credit reports.
Does Credit Repair Really Work?
Short answer is yes. The longer answer is credit repair works if you go about it the right way.
The three credit bureaus – Trans Union, Equifax and Experian – are the companies that create your credit reports. If you are going to successfully dispute negative information on your credit report, you must go through them to do it.
And you must know how to go through them the right way. Your dispute letters must be written in such a way that you get past the two systems put up by the bureaus.
Two Secrets to Credit Repair
The two secrets are the two systems the credit bureaus use. The first system is called “OCR” and the second is called “e-Oscar.” Both are computer systems the credit bureaus use in the dispute process; and if you don't understand these two systems you’re not going to get the results you desire and deserve.
OCR stands for Optical Character Recognition. It’s used by the 3 credit bureaus to scan in every dispute letter they receive. OCR categorizes your dispute as legitimate or as frivolous. You need to know that the credit bureau is looking for any reason they can deny your dispute. So the credit repair company must know the “loopholes” to get around the OCR system.
The problem is almost none of the credit repair companies know about OCR, much less how to get around OCR so the dispute is considered legitimate. OCR is the reason you don’t want to hire a credit repair company which just bombards the credit bureaus with letters not knowing what they are doing and why they are doing it. This can ruin your chances to repair your credit.
The second system is “e-Oscar.” Once you get past OCR, then you have to take on the e-Oscar system. What e-Oscar does is assign a 2 digit code to label the type of dispute you are submitting. That dispute then goes to the creditor who is reporting the negative information about you and the creditor either verifies information as inaccurate or it doesn’t respond which means the negative information is deleted.
Also There’s that Thing Called the Law
Now, there is a lot more to credit repair than I’ve covered here. For example, if a credit repair company is really good at what they do, they will be knowledgeable about federal laws like the Fair Credit Reporting Act, or its amendment The Fair and Accurate Credit Transaction Act. Another important law that can help resolve negative credit is The Fair Debt Collection Practices Act.