Many people who begin the process of repairing their credit eventually encounter one or more problems that, if not properly resolved, might make things worse. Here are the top 5 difficulties you’ll probably run into during the credit restoration procedure.
1. The Target Is Missed By Most Dispute Letter Templates
Both the FCRA and the FDCPA describe how a consumer can challenge inaccurate information on their credit report. A number of disagreement letter templates that are commonly used online have formalized these procedures. Furthermore, customers have been misled into thinking that all they need to do is download the sample dispute letter, complete it, and email it to the creditor or debt collector.
Most disagreement letter templates have the issue of being too legalistic, having a threatening tone, and having erroneous information. Additionally, customers think that a person will read their dispute letter and find their legal justifications convincing enough to delete the bad account. Unfortunately, there is very little interaction between parties during the dispute procedure.
Numerous proponents of credit repair contend that the FCRA and FDCPA establish legal precedent and oblige credit agencies, debt collectors, and creditors to delete negative entries when appropriate proof cannot be produced or a certain method is not followed. If this were the case, pre-written disagreement letter templates would function much more effectively.
The credit bureaus, creditors, and collection agencies know they cannot be forced to delete negative things until a court order or judgment forces them, which is the sad truth about the credit repair process. In other words, they are aware that they can stop working on credit repair until the person files a lawsuit.
2. Automation Drives The Credit Repair Process
Even though there is always a chance that mailing one dispute letter will lead to an erroneous item being deleted from your credit report, this isn’t typically the case. Why? Automation is the first justification.
According to some estimates, the three major credit bureaus get more than 20,000 complaints each day. Due to this, they had to automate the dispute resolution procedure, which primarily relies on the accuracy of the negative inputs. Your letter is scanned into their computer system, given a three-digit dispute type number, and delivered with a message requesting the creditor or debt collector to confirm the negative item. Your sincere dispute letter template has a lot of legalistic jargon that no one will ever read.
You can have requested confirmation of the negative item in your dispute letter or proof that the debt belongs to you. And the negative item is verified or validated with a few mouse clicks. A letter with the outcomes is given to you when the issue is “fixed.”
But nobody really did a check. The accuracy of the late payment date was not verified by a person. Nobody checked your signature against the actual, signed documents. And you’ll diligently keep sending letters in dispute, hoping that anything will change.
3. The Rejection Rate for Dispute Letters is High
When consumers write grievance letters, they will frequently be rejected. Creditors, debt collectors, and credit reporting companies appear to rely on the fact that the majority of individuals quit submitting dispute letters if the initial ones don’t get a positive answer. Finding the best approach and resources (credit repair letters), overcoming rejection, and putting in a lot of patience and effort are all necessary steps in the credit repair process.
4. Credit repair efforts might result in aggressive collection practices
When individuals challenge bad credit entries on their credit reports, debt buyers and collection organizations enjoy it. A collection agency will be able to see from this information that you are keen to repair your credit and ensure that any bad things are deleted. They observe a customer eager to repair her credit in preparation for a future acquisition or credit event.
Collection agencies frequently use forceful collection strategies, such as intimidating letters, threatening phone calls, and legal action, in response to this information in an effort to recover the debt you owe. The customer is more driven than ever to pay off previous obligations, therefore they act accordingly.
5. Credit Repair Takes Longer Than You Expect
Even though there is always a chance that mailing one dispute letter will lead to an erroneous item being deleted from your credit report, this isn’t typically the case. Even if the evidence is fully on your side, removal of the item could not happen right away. Credit rehabilitation demands perseverance. Expect the removal of one or more negative things from your report to take a minimum of six months if you feel that they should be. The task could take several years if you have a lot of unpleasant things.
Final Thoughts
Everyone who has a credit report is entitled to credit repair. However, it is difficult to remove all adverse information from your credit record. With a greater understanding of the potential complexities and concerns involved with credit restoration, you should be able to deal with them or avoid them entirely. Maintain your focus on the objective at hand, regardless of whether a credit reporting agency rejects your dispute letter or collection companies utilize aggressive methods to get you to settle your debt. You should start to notice outcomes over time.