Credit repair is the process of correcting the information that the major credit bureaus have in your credit files—the information used to create your credit reports. You can do credit repair yourself, with the help of a credit repair company or with the services of a credit lawyer. A credit lawyer—also called a credit repair lawyer—is an attorney that’s qualified to help you repair your credit and fight debt collectors.
There’s actually no such thing as a credit lawyer. Not for the legal industry anyway. While the legal industry recognizes “personal injury lawyers” and “bankruptcy lawyers,” it doesn’t recognize the term “credit lawyer.” Everyday people though, do use the term credit lawyer to describe an attorney who focuses on credit repair.
And because repairing your credit can be a difficult and tricky task, sometimes fixing your credit yourself just isn’t an option. It’s then that you might need—or want—to turn to a credit lawyer or a lawyer who skilled in helping people with repairing credit.
If you’ve defaulted on credit cards or utility payments in the past or had a vehicle repossessed, your credit has taken some hits. Those hits can accumulate and lead to damage that can take months or years to fix. And the credit bureaus and credit card companies and other lenders don’t care about your circumstances. What they care about is you making your payments.
Repairing your credit requires getting errors and negative items removed from your credit file. Those negative items can include missed a history of missed payments, debt collections, repossessions, tax liens and judgments. Sometimes, it’s possible to take care of bad debts or credit problems on your own. In other cases, the issues are larger or creditors or the bureaus uncooperative, and it’s necessary to have help. And a credit repair company or credit lawyer may be just what you need to get your credit back on track.
How Does a Credit Lawyer Work?
Your credit might need fixed because of a mistakenly reported late payment. Someone else’s information getting into your file. Or a lingering situation of your own.
Say you lost your job a few years ago. You couldn’t make your car payment and relied on credit cards to survive and provide for your family. Without realizing what was happening, your credit card debt ballooned to more than $30,000. You couldn’t make the payments each month, and you still have debt collectors dialing your phone every day trying to cash in on what you owe on your credit cards and your car was repossessed.
You’re back on track with a job, but still in debt and those negative items left your credit file a mess.
This is where a credit lawyer can help. A credit lawyer works for you to:
- Work with the credit bureaus to remove errors from your credit report
- Work with the credit bureaus to remove negative items from your report sooner than they might fall off naturally
- Possibly settle with debt collection companies for a fraction of your original debt or a workable payment plan of some type
- Representing you in court cases if creditors take legal action against you
A credit lawyer first reviews your credit history to see if there are possible errors on your report. The lawyer then looks for ways to improve your score. This can include negotiating with credit reporting agencies. These negotiations can also pave the way for errors and other negative items to be taken off, so if you’ve had late payments in the past, a foreclosure or a car repossession, there may be ways for the credit lawyer to have these removed.
In addition, the lawyer can also negotiate what is known as settlement amounts with the creditors. So, you owe a large amount, your credit lawyer may be able to get it significantly reduced. Lastly, the lawyer can represent you in a court of law if a credit bureau decides to file a suit against you.
Credit Lawyers vs. Credit Repair Companies
There are advantages and disadvantages to utilizing both credit lawyers and credit repair companies. A credit lawyer, for example, doesn’t work for a company. He/she is either an individual working alone or working for a firm with other credit lawyers. A credit lawyer or law firm works for you, which means that you get individual time with your attorney and the attention you need to improve your credit.
The downside to using a credit lawyer is that most every attorney, depending on the results of the case, requires fees. Therefore, you may wind up owing less money to a credit card company or collection agency and come out with better credit, but you also have a legal bill to pay.
On the flip side, the positive impact to your credit and the resulting reduction in the interest rates you pay and the access to loans and credit cards you have likely make the cost worth it.
Credit repair companies include larger corporations designed or small, local firms. They typically take on multiple cases at once, have many years of experience and are trained to tackle an array of credit-related problems rather than just specific ones. A credit repair company may be more beneficial to you, depending on the size and difficulty of your credit issues.
At the same time, credit repair companies, much like credit repair lawyers, require fees, meaning you’re likely to owe money in the end. However, fixing your credit and the future access you get to credit can be worth the cost here too.
Whether you choose a credit repair company or credit lawyer, the one thing you should expect to get is the benefit of the experience either has with dealing with creditors, credit bureaus and collection agencies. In the case of a credit attorney, you should also expect the benefit of the attorney’s legal knowledge and experience. You’re also paying for their time, so you don’t have to invest the time yourself. It’s that knowledge, experience and time that may make choosing a credit repair company or credit lawyer worth your while.
How to Find a Reputable Credit Lawyer
People throughout the country need assistance when it comes to repairing their credit. And there care credit lawyers in virtually every state in the U.S. Online directories are available that you can use to find credit lawyers in your area. The American Bar Association also offers referrals for attorneys as do each states’ state bar associations.
You can also check your local Better Business Bureau to investigate the reputations of credit repair companies and attorneys.
If you’re in a low-income group, you may be eligible for free legal help. The Consumer Financial Protection Bureau (CFPB) website offers a list of legal services links to check.
Regardless of how you find your credit lawyer, before committing to work with him/her:
- Ensure that he/she is experienced with consumer law, debt collections and the Fair Debt Collection Practices Act (FDCPA)
- Check his/her record with your state bar association
Can’t I Just Do My Own Credit Repair?
You can choose do-it-yourself (DIY) credit repair. If you have a single error or just a few errors, disputing errors yourself is a good route to take.
If you have multiple errors or negative marks you want to go away sooner than later, a credit repair service or credit lawyer may be a better option. Credit repair companies and credit lawyers do charge you for their services. If you tackle things on your own, however, it costs you nothing but your time. And there are steps you can take to get things started.
Under the Fair Credit Reporting Act, you can request a free copy of each of your credit reports from each bureau once a year. If you see errors on your reports, file a dispute with the agency whose report the error was one—even if that’s all three. You do have to file with each bureau separately.
The Fair Credit Reporting Act gives the bureaus and data furnishers 30 days to investigate and remove inaccurate items. That time can extend to 45 days under certain circumstances. The actual timeframe depends on many factors, including postal mail timing.
Where do-it-yourself repair can get difficult is in the time it can take. While you save money, you may spend hours or days going through your credit report and making notes about everything that appears questionable, and even then, the credit bureaus are likely to question you before any official decision is made regarding your report. You have to then wait for the changes to be recorded.
With a credit lawyer or credit repair company working on your behalf, you have a representative to do all the negotiating and research for you, so you can concentrate on other things like finding a better job, taking care of your family or simply living.
In the end, whether you go it alone or use a credit repair company or credit attorney depends on your personal preferences and the complexity of your credit situation. You can always try it yourself first and then fall back on a credit repair company or credit lawyer if you want.
To learn more about credit and what you can do to improve your credit score, visit the Credit.com Personal Finance Resource Center today.