Nowadays, it is a common occurrence to see and read advertisements from firms that are supposedly very ready to offer you quick-fix credit repair services. According to the Federal Trade Commission, FTC, it is essential to exercise caution however desperate your situation may seem – these are all the tell-tale signs of a scam waiting to happen.
It is impossible to give your credit situation a quick fix; credit repair can be done, personally, and this will require some time and effort on your part to ensure that you make good on your debt repayment plan. Regardless of how promising these ads tend to be, you should know that no person or organization can erase your credit report of negative information.
1Your Credit Repair Rights
The law provides that you can ask for an investigation into details in your report that you believe are incomplete or inaccurate. This service is freely provided. While some people have used credit repair clinics to do this for them, there is nothing involved that you can’t do on your own at a very low cost. These sentiments are backed by statements from the Fair Credit Reporting Act (FCRA) as follows:
- You’re entitled to a free report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
- Each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three companies have a central website, a toll-free telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to. To order, click on www.annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to:
Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
You can use the form in this brochure, or you can print it from www.ftc.gov/credit. You may order reports from each of the three consumer reporting companies at the same time, or you can stagger your requests, ordering one from each company throughout the year from the central address. Don’t contact the three nationwide consumer reporting companies individually or at another address because you may end up paying for a report that you’re entitled to get for free. In fact, each consumer reporting company may charge you up to $10.50 to purchase an additional copy of your report within a 12-month period. - It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider.
2The First Step to Repair Your Credit
From the above provisions you will first have to obtain your credit report and peruse it to establish if any of the details are faulty or inaccurate. Free copies of these can be obtained from www.annualcreditreport.com.
Once you identify some details you need to get rectifications for, you should proceed to contact the respective consumer reporting company with this information in writing. Your letter of dispute should include your correct name and address, a proper identification of the details that appear erroneous to you, reasons, facts and details that support your opinion, and the request for the erroneous information to be deleted or corrected. It will be helpful for you to also include a copy of your report having circled those items that you dispute. Send this dispute letter via certified mail, ‘return receipt requested’, so that you can have prove that it was received by the same consumer reporting company. It is prudent to retain copies of your letter and all attachments included.
3What Happens Next? An Investigation Into the Dispute...
Unless your dispute is regarded frivolous you should expect to have the consumer reporting company conduct an investigation within 30 days. The company will also forward all the requisite details to the organization that produced the disputed information. This organization will also conduct investigations into the matter and give the findings to the consumer reporting company. In the event that your dispute is legitimate, the organization is obligated to pass the information to the nationwide reporting companies so that corrections to your file can be made.
4After the Investigation is Complete...
When all is done the consumer reporting company will have to give you details of the results in writing alongside a free copy of your report if there are any changes to see. The consumer reporting company is forbidden to include the disputed information, i.e., items deleted or changed, in your file unless the information provider has verified these for accuracy and completeness. Further, the consumer reporting company must furnish you with a written notice indicating details of the information provider, i.e., name, address and phone numbers.
Upon your asking, the consumer reporting company is obliged to dispatch notices of correction to all who received copies of your report in the last six months. You can also have the company send corrected copies to all who had received copies in the last two years for purposes of employment. This is basically how the process of repairing your credit should play out.
5In the Event that an Investigation Does Not Remedy the Dispute…
If this happens you can request the consumer reporting company to have the dispute statement included in your file as well as future reports. The company can also be requested to provide your statement to all who’ve recently received a copy of your report. This service is often provided at a fee.
For this situation you have to inform, in writing, the creditor or concerned information provider, stating that you find a specified item to be in dispute. Here too you should include copies of the documents that underpin your position. When the provider reports this disputed item to the consumer reporting company it will have to include your dispute notice. Should your concerns prove accurate the disputed information may not be reported again by the information provider.
6Accurate Negative Information
In trying to repair your own credit you should realize that the ‘negative information’ can indeed be accurate. If so, these details can only be removed with time. Such negative information can be reported by a consumer reporting company for seven years. Information concerning bankruptcy can be reported for ten years.
7Tips for Improving Your Credit Score
The Federal Reserve has a list of 5 critical tips you can use to keep your credit score healthy. Put simply, they are as follows:
- Obtain copies of your credit report and check to ensure that the provided details are accurate.
- Settle all your bills on time.
- Ensure that you at least understand how the credit score is arrived at.
- Make sure you know what legal steps are followed for the improvement of a credit report.
- Exercise caution with regards to credit-repair scams.
More information and tips for improving your credit score can be accessed via: www.federalreserve.gov/consumerinfo/fivetips_creditscore.htm.
8Getting Help from a Credit Counseling Organization
You might be one of those people who feel unable to adhere to a workable budget, stick to a repayment plan offered by creditors, or even keep tabs on your bills. Help for you may just require that you contact a credit counseling organization; many of these are non-profit but this mustn’t be taken to be an assurance for getting services that are affordable or free, or legitimate for that matter.
These services can be offered via telephone, the Internet, or a physical local office, and the best way to go about it is to seek in-person counseling. Non-profit counseling programs are available in many universities, credit unions, military bases, housing authorities and US Cooperative Extension Service branches. For more information on where to find these you can contact your local consumer protection agency, financial institutions, as well as friends and family.
Read more from the following:
http://www.creditinfocenter.com
