Credit repair is the process by which a third party, also known as a credit repair organization or credit services organization, attempts to remove information from your credit reports in exchange for payment. These businesses are for-profit, and their services are promoted as having the ability to help people improve their credit.

If you've had a credit card application turned down, it could be an indication that you need credit repair. Credit card companies are required to send you an adverse action notice explaining why your credit card application was denied. If your application was denied due to information in your credit report, you are entitled to a free copy of the report.

A credit score of less than 740 is now considered subprime. If your credit score is less than 650, you will undoubtedly require credit repair. If you don't know what your credit score is, now is a good time to find out.

Hiring a credit repair company can really help in this situation. They assist most people in removing collections by disputing errors with the three credit bureaus on your behalf. This means you won't have to contact any of the credit bureaus or collection agencies yourself.

If a late payment was correctly reported to one of the three major credit bureaus (Experian, TransUnion, and Equifax), it will not be removed. Credit repair firms do not have backdoor access to credit bureaus or special abilities to remove late payments.

Even if you pay off past-due bills, the late payment will remain on your credit report for seven years. And it will still take seven years to drop off no matter how late your payment is, say 30 days versus 60 days.