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Credit Restoration VS Credit Repair

Posted by Percy A Lowe on September 24, 2012 at 6:55 AM


There is a slight difference between a credit repair and credit restoration company. A lot of people don't even know that there is a debate on this matter, but, in reality, there is a huge difference. To start you as the potential client needs to know that it is a difference. You also, need to know what to look for in any company saying they have the ability to improve your credit. There is plenty reason why the services are needed but make sure you getting transparency as well from who are offering their services. Most credit repair companies won't show you their methods of how they are going to perform what they say they are going to do.


What is a credit repair? It is the removal of any negative or depreciating factors from a consumer's credit report in financial analysis. Some of them are tax liens, late payments, charge-offs, collection accounts, foreclosures, bankruptcies or any other negative information. The process here is done by disputing these items with the credit bureau. A client can choose from sending a letter to the credit bureaus or by disputing online. Such service can be consulted from a consumer or credit repair company that they are able to hire.


A credit repair company implements only just three to four laws in their dispute letters. Those laws are the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA), Equal Credit Opportunity Act (ECOA), and Fair Credit Billing Act (FCBA). In terms of client acceptance, it follows a service of welcoming any client, who wishes to repair their credit. In letters, it uses canned/boiler templates, which is different from what a credit restoration company has in letters. Moreover, only a few items, at a time, are disputed.


In comparison, a credit restoration applies pre-litigation strategies in its disputes, unlike in credit repair services. This, in turn, allows added consumer and commercial laws as well as documents in non-compliance. Such are the Credit Card Accountability Responsibility & Disclosure Act (CARD), Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Fair and Accurate Credit Transactions Act (FACTA), Updated Section 312 of the FACTA, Fair Credit Billing Act (FCBA), Federal Trade Commission Opinion Letters (FTC), Gramm-Leach-Bliley Act (GLB), Health Insurance Portability and Accountability Act (HIPAA), Real Estate Settlement Procedures Act (RESPA), the Soldiers and Sailors Relief Act (SSRA), the Truth in Lending Act (TILA), Truth in Savings Act (TIS), Uniform Commercial Code (UCC), and Equal Credit Opportunity Act (ECOA). Credit restoration also uses state consumer laws to help in client’s case. These can be used in combinations of 2 or 3 laws per client's case so that the maximum number of resources is reached. In terms of letters, credit restoration is able to draft custom letters whenever applicable. Compared with credit repair, in business analysis, a credit restoration company, also, disputes with the original creditor and not only credit bureaus. Why is this so? This takes place during more aggressive strategies followed in a case. Furthermore, it faces all accounts simultaneously and lets debt collectors undergo a vigorous verification process before winning a case.


The final component of credit restoration that you will never see with credit repair companies is education. An excellent credit restoration company provide many resources to help the client after and during the restoration process. One is education on maintaining above average credit continuously. To fully understand define restoration and repair and you get an idea of which one is better. While restoration is a one- time deal and repair can take up to more than once. And each time it cost you to pay for the services of repair in full or per item deleted.

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