Now more than ever, having good credit is important if you want to qualify for a mortgage. Borrowers with all types of credit profiles can and do obtain mortgages, but those with the best credit profiles get the best rates and terms.
Many borrowers, especially those with dings on their credit reports -such as late payments and medical collections – might benefit from a credit restoration service.
Many credit restoration services work under the guidelines of FACTA – the Fair and Accurate Credit Transactions Act. FACTA states that creditors are obligated to follow certain procedures before reporting information, specifically derogatory information, to the credit bureaus.
Credit restoration services, in cases where proper disclosure was absent, confront the creditors, sometimes with threats of legal action on behalf of a borrower, and can often have information such as late payments, collections and judgments removed from the credit report, under FACTA laws. With most items that carry some type of balance, such as collections, borrowers are still obligated to repay them but can do so without having it appear on their credit reports. A credit restoration can take anywhere from 30 to 60 or more days.
Borrowers need to research credit restoration services. Many are legitimate, but as with many other industries that have appeared after the housing crisis, there are some that will try to charge high fees or skimp on the service they provide.