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Are There Any Legitimate Credit Repair Companies?

Credit score report cardIn the United States, credit is a way of life. Bad credit can prevent you from financing a home, obtaining a credit card and possibly deny you a job. Because of all these reasons, it is important to maintain a good credit rating and credit score. If you discover legitimate errors on your credit report, you have the right under the Fair Credit Reporting Act to challenge any credit entries that you believe are inaccurate. Credit repair companies use the dispute a

The dispute procedure to repair your credit is relatively simple. Here are the steps to contest legitimate errors on your credit report:

Inform the credit bureaus, in a letter, what information you believe is inaccurate.  Provide the credit agencies with your full name and address. Identify the item(s) that you believe are inaccurate in your dispute letter. Explain why you are disputing the information and request that the negative credit entries are corrected or removed. Send a copy of your credit report and circle or highlight the disputed items. Send your dispute letter and any supporting information by certified mail. Make copies of all information that you send to the credit agencies. Credit disputes can be made online.

By law, the credit reporting companies are required to investigate your disputed item(s) within 30 days. The credit agencies also must provide the creditor(s) with all the relevant data you provide about the inaccuracy of the credit listing. After the creditor receives notice of a dispute from the credit reporting company, the creditor must investigate your dispute, and report to the credit reporting company the result of their investigation. If the creditor finds that the disputed information is inaccurate, the creditor is required to notify all three of the largest credit reporting companies to correct the consumer’s information in their file.

Is your dispute legitimate?

If not, the law allows the credit reporting agencies to ignore frivolous claims.

The credit bureau must provide you, in writing, the result of the investigation and provide you with a free copy of your report if your dispute results in a change.

Sounds simple right?

In reality, you may find that the credit reporting companies are not the independent arbiter and advocate that you think they are. You may find that the credit bureaus will comply with the law and forward your dispute claim to the creditor(s). The creditor(s) usually answers your dispute with a quick and certain answer that the derogative credit is accurate and that the negative credit listings should remain on your credit report.


How can I tell a credit repair scam from a reputable credit counselor?


There are credit counselors who can help you with your credit report, and there are others who will take your money but not help you with your credit report.

Companies that demand money before providing services are likely to engage in credit repair scam.

Even if the information is accurate and up to date, the company may claim that it can guarantee a certain increase in your credit score or the elimination of negative credit information from your credit report.

Detecting a credit repair rip-off

Companies that demand money before providing services are likely to engage in credit repair scam.

Even if the information is accurate and up to date, the company may claim that it can guarantee a certain increase in your credit score or the elimination of negative credit information from your credit report.

If you see ads or get offers from a business to repair or restore your credit, it may be a red flag:

Attempts to get you to pay for your expenses in advance.

It guarantees the removal of negative information from your credit report.

refuses to or avoids explaining your rights to you.

It recommends that you avoid contacting credit reporting organizations.

A variety of federal laws regulate credit repair companies, including the Credit Repair Organizations Act and, in certain instances, the Telemarketing Sales Rule, both of which ban deceptive techniques and the collection of up-front fees.

These rules make it illegal for credit repair businesses to use deceptive methods.

You may be able to sue a credit repair business under these statutes.

What is the most effective method for locating a reputable credit counselor?

The majority of credit counselors can help you in person, online, or over the phone.

You can find a list of approved credit counselors online.

SOURCE: Consumer Financial Protection Bureau (CFPB)