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What is Credit Repair
Sometimes it’s difficult to decide if you can deal with the credit reporting agencies and creditors or hire a credit repair service to help you out. Finding a really good credit repair service will take time and a lot of leg work. Some people believe the work entailed in finding a good service is harder than just doing it themselves. Read on to learn your rights for disputing inaccurate information on your credit report. What to watch out for when looking for a reputable credit repair service and what you can do if a service does not deliver what they have promised. Also, learn what is not inaccurate and cannot be removed. With this information, you should be able to decide which avenue will work best for you.
What A Good Credit Repair Service Can Offer:
Recent studies have shown that one out of five people has errors on their credit reports. A good credit repair service uses three standards when addressing your credit report. Is the report accurate, entirely fair and fully substantiated? Often times, poor credit repair services seem to overlook the last two standards of fair and substantiated which includes communication with the creditors. One thing a good credit repair service can do for you is to address one that keeps appearing multiple times on your report. If you are in collection and that debt has been sold to different collectors, it’ll show up each time on your report. Although this might be accurate, it’s not fair and is continually damaging your credit score.
Your repair service will pull your credit reports from the three major credit reporting agencies. These reports can vary because each one has its own form of data. For instance, creditors will report to only one and can be based on who they are such as lenders, credit card companies or a debt collector. Therefore what shows up on one agency might not show on the other two and that includes errors.
The 3 Credit Report Agencies Are:
Once errors have been detected, your credit repair service will ask you for any documentation that they might need. In turn, the agencies will receive any disputes with supporting information and will work with your credit repair service to decide if an item should be removed from your report.
- The major law that protects your rights when it comes to credit reporting is the Fair Credit Reporting Act, but it’s not the only law.
- The Fair Debt Collection Practices Act oversees collection agencies and their actions.
- The Fair Credit Billing Act regulates original creditors.
- There are other laws that oversee other areas such as military service, medical illnesses, etc.
How Long Does It Take To Repair Your Credit:
Getting errors off your credit report is one of the best ways to see an improvement in your credit score. Credit bureaus have to respond and/or resolve any dispute within 30 days. There are some exceptions that might take up to 45 days. But keep in mind, a credit repair service cannot guarantee exactly when your credit will improve because credit problems can be very difficult.
What Is A Legitimate Credit Repair Service:
They will check your reports to see if there are items that should be removed and will dispute these items on your behalf. They will also make sure that after removal, these items do not reappear.
You will typically pay from $60 to $100 a month and the overall process can take anywhere from a few months to a year. They may argue that you will save as much as their services because you will start receiving better interest rates due to your better credit score.
What You Should Get From A Credit Repair Service:
The service you choose should have a full understanding why you want to dispute an issue on your report. They want to make sure that the 3 standards of fair, accurate and substantiated are being met.
A reputable credit repair service will make sure you understand your rights and will answer any questions you might have.
They should go over what they will do as your representative to the credit bureaus. They should explain what they can or cannot do and layout their service so you understand everything.
Keep in mind, a credit repair service can only remove what shouldn’t be on your report. They cannot remove information that is accurate, fair and substantiated. As mentioned above. there are credit repair services that will charge up to $100 per month for their services. If you educate yourself, go to the 3 major agencies on your own, there’s nothing they will charge for, that you can’t do on your own.
What To Watch Out For With A Credit Repair Service:
When looking for a credit repair service, there are signs you should look out for.
- If a company promises ridiculous results such as immediate 100% repair – run!
- Also, if a company wants payment before they start work, it’s against the law! The FTC prohibits credit repair services from charging or collecting any money prior to work.
- Any repair service that sounds too good to be true, probably should be left behind.
A credit repair service does not have any rights, that you don’t have, in disputing information on your credit report. The FTC warns agencies that make false claims that they can remove all negative information from your report. Even going as far as stating all negative information that is accurate can be removed or help you create a new identity!
There are laws in place that will protect you from credit repair services that mislead potential customers.
What The Credit Repair Organizations Act Is:
This act makes it illegal for credit repair services from not telling you the truth on what they can or cannot do for you. They cannot charge you before performing services. CROA is enforced by the Federal Trade Commission and requires:
- You have 3 days to cancel with a credit repair service/company without charge.
- Provide you with your legal rights and the details of their service in writing.
- Provide you with the total cost for their services.
What If Your Credit Repair Service Does Not Provide The Service You Were Promised?
- You have the right to sue them in a federal court for what you paid them or actual losses.
- You can seek punitive damages which is money from the company violating the law.
- You can join others in a class action lawsuit against the company – if you win they pay your
Where Should You Report Credit Repair Fraud To:
Your State’s Attorney General’s Office: – Most states have laws that regulate credit repair services/companies. If you have a legal issue against a credit repair service, report it to the Consumer Affairs Office or your Attorney General’s Office.
The Federal Trade Commission: – The FTC cannot resolve individual credit issues but it can take actions against a company where there is a pattern of potential law violations.
How To Do It Yourself Credit Repair:
If you have a relatively simple issue you might be able to handle it on your own. When attempting to do so, make sure you are clear and accurate in your dispute. Mail a dispute letter to each one of the credit report agencies. These agencies will only address what is on their reports, they have nothing to do with the other two. Thanks to the internet, you can also submit your dispute online to each one of the agencies’ websites.
What You Have To Do:
- In writing, tell the credit reporting agencies what you believe is inaccurate. Provide copies of any documentation that supports your dispute. Always Keep The Originals – Never Give Them Out.
- In the letter, give them the facts and the reasons you are disputing certain information and ask them to have it removed.
- You can enclose a copy of your credit report and highlight or circle the questionable items.
- Send the letter Certified Mail so you will get a returned receipt request. You will know that the credit bureau did receive your letter. Always have copies of the dispute letter and enclosures.
The credit report agencies have to investigate the disputes within 30 days. They will forward the data you provided on to the creditor that provided the information. Once the creditor gets this information, they must investigate, review the information, and send the results back to the credit agency. If the disputed information is found to be inaccurate, this information must be given to the credit report agency in order to correct your report.
The agency must provide you with the results, in writing, along with a copy of your credit report if the results have made a change on your report.
If an item is changed or deleted from your report, it cannot be put back on your report unless the creditor can verify that the information is accurate and complete.
If negative information on your report is accurate, you will have to wait for the legal period of time for it to be dropped off. Most negative information will remain for 7 years and bankruptcies remain for 10 years.
There is no time limit on information about criminal convictions, information reported in response to a job application that pays more than $75,000 a year or if you have applied for credit or insurance that is more than $150,000.
What Errors To Look For In Your Credit Report:
- The misspelling your name can lead to entries that belong to someone else. This can also lead to
positive entries not showing up on your report.
- Incorrect dates.
- Accounts that do not belong to you.
- Debts that should have been dropped from your report due to their age.
- Debts that cannot be validated and verified.
Only you can decide whether you want to deal directly with the credit bureaus or hire a credit repair service. If you are seeing questionable items on your report, you need to get these issues resolved. Items on your report that are inaccurate are just pulling your score down.
With this information, you should have a better idea what you can or cannot remove from your credit report. This guide will help you understand the steps that must be taken if you choose to deal with it on your own.
Should you hire a credit repair service, do your homework. Find out all you can about a specific service and watch out for claims that are just unrealistic! There are many good credit repair services but it will take work on your part to weed them out from those that are questionable.