RESOURCES

Repair Your Credit Yourself

Everyday consumers are targeted by Credit Repair Services as proven, safe methods to fix, erase, and overall improve one’s credit ratings. Despite their numerous ads, they most often cannot deliver on what they promise.

The theory is that with their expertise you can quickly and effortlessly make drastic improvements in your credit score. You are then free to take on more debt for that car, home, or whatever else is offered. Unfortunately, most consumers only lose out on their hard-earned money they really could not afford to part with – only to face a more dire financial situation. The real truth is that with time, a solid financial plan, and some perseverance you can repair your own credit standings.

    Occasionally a legitimate company can be found, but as always, do your homework. Following are some warning signs that should alert you to companies to avoid.
  1. Watch out for companies that do not inform you of your rights; or for steps you can do yourself for free. You can do this yourself.
  2. Stay clear of advice to dispute everything on your credit report or to completely avoid any reporting agency. Negative information is not necessarily incorrect information; and credit bureaus are not your enemy.
  3. Avoid any company that requires payment before providing a service. Under the Credit Repair Organizations Act, services must be completed as promised before full payment is required.
  4. Be aware of anything that seems illegal or questionable. Creating a new identity with an Employer Identification Number for a new credit report is fraud. Committing fraud based on illegal advice still subjects you to prosecution including charges for mail or wire fraud. Accurate information, even if negative, cannot be removed from your credit report.

If you feel you have been taken advantage of by a Credit Repair Service, report it immediately. While you may feel embarrassed or fearful, laws concerning this are there to protect you. Contact your local consumer affairs office or your state Attorney General. Check the Blue Pages of your telephone directory for the phone number or www.naag.org for a list of state Attorneys General.

    If you believe your credit report does contain incorrect information, you do have the right to contact the credit bureau which reported it. Disputing information you believe is incorrect costs you nothing and is not hard to do. Under the terms of the Fair Credit Reporting Act, an agency is required to:
  1. provide you a free report if an application is denied because of credit when you ask for one within 60 days of your notification.
  2. investigate disputed items within 30 days of being notified.
  3. provide you with a written report of the findings within 5 days of completing the investigation.
  4. provide you with a copy of your updated credit report if the disputed item has changed as a result of the inquiry.
  5. correct inaccurate or incomplete information on your report once investigated and found to be inaccurate.
  6. send notices of any correction to anyone who received your report in the past six months, upon your request.
  7. provide you with a free copy of your credit report once every 12 months when requested.

The best way to communicate with any credit bureau is a letter sent by registered mail with a return receipt. In your letter include copies (not originals) of any documentation supporting your position. Provide your complete name and address, clearly identify each item in question, the facts and explanation of why the item is being disputed, and a request to have it removed or corrected. (A sample dispute letter follows this article.) You may want to enclose a copy of your credit report with the items in question circled. Keep copies of your dispute letter and enclosures. The good news is that if a disputed item is changed in your favor, it cannot be added to your report again unless the provider of that information can verify it is indeed accurate.

If an investigation does not resolve your dispute, you can ask that a statement detailing your viewpoint be included in your file and in future reports. You can also request this statement be provided to anyone who received a copy of your report in the recent past, but expect to pay a fee for this service. In cases where your credit report does contain correct negative information, time is going to be your best ally. For more information on your credit report, visit www.ftc.gov.

If your credit is not where you want or need it to be, there are things you can do to help improve your score and overall rating. See our article, “How to Build Good Credit” for helpful information.

Sample Dispute Letter
Date

Your Name
Your Address
Your City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my credit file. The items I am disputing are encircled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position.

Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,
Your name

Enclosures: (List what you are enclosing)