Credit Repair Companies |
By Sybria White on August 6, 2010
.jpg.aspx?width=75&height=75) We are constantly reminded about the importance of our credit scores. Your employment status, home loans, auto loans and some education loans are all based on your credit. Consequently, there is a huge incentive to ensure your credit is in good condition. However, heavily advertized credit repair company claims may not be the answer. The Federal Trade Commission points out that the familiar claims these companies make like “We can erase your bad credit — 100% guaranteed.” 1;are more often than not, a scam. To avoid the detrimental effects of credit repair companies, this article will offer tools suggested by the federal trade commission to recognize predatory companies and repair your credit on your own. Additionally, the article will also address legitimate credit repair methods that won’t leave you high and dry.
Tell Tale signs of a Credit Reporting Company scam:
- The company offering to help to you requires payment before any services are rendered. “Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised”1
- The company fails to notify you of your rights and what resources are available for you to repair your credit yourself that are free of charge.1 One free resource is a copy of your credit report annually. To request a free copy of your credit report visit this link: annualcreditreport.com.
- The company discourages you from contacting the three major national credit reporting companies.1
- The company encourages you get rid of any negative information on your credit report regardless of whether the information is accurate or current.1 Legally no one can remove accurate or current information from your credit report regardless of its positive or negative nature1.
How to repair your credit on your own
Now that you know what to stay away from, the following will offer effective strategies to repair your credit without the help of repair companies:
- Know the contents of your credit report. You are entitled to a copy of your credit report once a year. Follow the link provided in the previous section to access your credit report.
- Notify the consumer reporting company, in writing, what information you think is inaccurate. Also provide proof in the form of documentation (copies, not originals).1 A sample letter can be found at the following link: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm
- Notify the creditor in question of your dispute.1 Include copies, of documented proof that support your claim.1 Of the creditor reports the disputed item to a credit reporting service, they are required to include a notice of the dispute.1 If the information in confirmed to be inaccurate the reporting company will never report this information again.1
In short there is no quick fix when it comes cleaning up one’s credit. The only legal way to clean up your credit is to report inaccurate information, and simply have it removed. Any company claiming any other way to “clean up” your credit is most likely a scam. So if you have negative, accurate information listed on your credit report, the only thing you can do is to wait until the credit reporting company stops reporting it, which is typically 7 years.1 Therefore, the take home message is to be careful with your credit stay informed and to avoid “quick fixes” that will most likely leave you high and dry.
Source:
1 http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm
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