Article
Credit Repair
Summary:
Credit repair plays a vital role in improving the credit history of an individual. The credit repair industry is booming like never before. There are several companies offering to repair your credit by working out with the credit bureaus directly. Nevertheless, you should know your rights and exercise them whenever necessary. The article below also highlights how you can recognize a credit repair scam.
There are many companies claiming to repair your credit over night. The fact is there are no shortcuts in credit repair. It is quite likely that companies making such claims may not be able to live up to their promises. Credit repair brought about legitimately by following a systematic repayment plan goes a long way in achieving financial stability.
Exercise your credit repair rights
Information cannot be removed from a credit report legally. If you come across any information that is inaccurate or faulty, you have the right to dispute it. A debtor may hire the services of a credit repair company. However, you can do the same thing on your own.
Fair Credit Reporting Act (FCRA)
As per FCRA, consumers are entitled to the following with regard to the credit reports-
- You can get hold of a free credit report if your application has been turned down and you have been subjected to “adverse action” by an organization in matters related to employment, credit or insurance. You are required to ask for the report within 60 days from the refusal of your application.
- In the event you don’t have a job you can claim a free credit report. Some of the other circumstances when you can claim a free credit report includes identity theft and if you are on a welfare program.
- A credit report is made available by the three reporting agencies namely Equifax, TransUnion and Experian every year.
- Disputing inaccurate information on credit reports does not attract any fees. As per norms of the FCRA, the consumers as well as the information provider hold the responsibility to remove errors from the credit reports.
How to recognize a scam related to credit repair?
If you are planning to hire the services of a credit repair company, watch out for the following signs. You can find out if the company has ill motives and is making false promises.
- The company you are planning to hire suggests that you should be disputing information in the credit report as a whole irrespective of the accuracy. They recommend that any negative information should be removed even if it is accurate.
- The company does not reveal consumer rights or suggest methods so that you repair credit on your own.
- The credit repair company advises you to establish a fresh credit identity by applying for Employer Identification Number instead of Social Security Number.
- You are required to make payments to the company before they start working for you or before the entire credit repair process is taken to completion.
