Credit Repair

Credit Repair? Are they worth it?
Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money.

No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):

Reporting Accurate Negative Information

When negative information in your report is accurate, only the passage of time can assure its removal. A consumer reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting: information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period. Generally, the period runs from the date that the event took place.

Don't be tempted to run to one of the many companies saying they will erase your bad credit for a price. You need to be aware that the only ones who can permanently remove a debt from your record are the credit bureau or the creditor.

What most credit repair clinics and credit doctors do is dispute all derrogatory credit information to the three major credit bureaus on behalf of the consumer

Repairing your record

The first step in repairing your credit record is finding out what's on it.

Get Your Free Credit Report and Score!

However, reports are free if you were denied credit, are unemployed or on welfare, or were a victim of credit card fraud.

Reviewing your credit report will help you determine whether there is any old or erroneous information in your file. Serious errors could cause consumers to be denied access to mortgages, car loans and credit cards. The creditor may have already listed Cellini's debt as a "charge off," which is the worst thing you can have on your credit record, other than a bankruptcy.

A charge off means that even if you pay the debt off now, a record of it will remain on file for other lenders to see for up to seven years. How do you remove that ugly spot? First, keep in mind that there is no charge to dispute mistakes or outdated information on your credit record. Ask the reporting credit bureau for a dispute form and submit it with any supporting documentation.

The reader is correct regarding the statute of limitations for legal recourse against consumers. In most states, the statute ranges from three to six years, but it may be as long as 15 years in others. According to the Fair Credit Reporting Act, federal law says that a delinquent account can remain on an individual's credit record for up to seven years. A bankruptcy will stay on a person's record for 10 years.

What the Credit Bureaus Don't Tell You

Each item on your credit report must be proven or it cannot remain in the report. If the credit bureau cannot verify the item when investigated, it must be removed from your file whether or not it's true.

Every negative entry on your report can be denied or challenged at any time. The bureau must reinvestigate and if that item cannot be verified within a "reasonable amount of time", it must be removed from the file.

Items when challenged can be mistakenly erased. Consumers say they often experience computer operator mistakes.

Many times the creditor does not re-verify in time or the credit bureau is busy and does not handle your dispute properly. It must then be deleted.

The older an item, the more difficult re-verification is. It is possible it cannot be verified because records may no longer exist after 1 or 2 years.

Dealing with Credit Bureaus

Credit Bureau's are nothing more than record keepers, they keep a record of who has given you credit, when they gave you credit, how much credit you are given and whether or not you paid it back on time. When you want to obtain credit cards, loans, financing for a car or home, leases, apartments and sometimes even employment, the lender or bank will check your credit to see your financial history.

Credit Bureaus are paid by the people who request your credit file.
Credit Bureaus have no legal power over you. Banks, police or the government does not run them; so don't be intimidated by them. They are the Credit Bureaus because they own large computer systems capable of storing credit information on everyone in the United States. However, because of the tremendous amounts of information on their computers, their method of storing information is very basic and ridden with many errors. Since the bureaus have made so many errors in the past, all Federal Laws regarding credit information are very much in your favor.