Get the credit you deserve!
Credit Repair: Self Help May Be Best
Be cautious about credit repair services
You see the advertisements
in newspapers, on TV, and on the Internet. You hear them on the radio. You
get fliers in the mail. You may even get calls from telemarketers offering
credit repair services. They all make the same claims:
“Credit problems? No problem!”
“We can erase your bad credit — 100% guaranteed.”
“Create a new credit identity — legally.”
“We can remove bankruptcies, judgments, liens, and bad loans from your
credit file forever!”
Do yourself a favor and save some money, too. Don’t believe these
credit repair
services statements. Only time, a conscious effort, and a personal debt repayment
plan will improve your credit report. There are no quick or easy fixes for a
poor credit history. If a company promises to clean up your credit report, remember: Your credit history is maintained by
private companies called credit bureaus that collect information reported
to them by banks, mortgage companies, department stores and other creditors. Only time will heal a poor credit history — even if your
problems were due to illness or unemployment. If there are genuine mistakes or outdated
items in your report, you can fix them yourself , providing credit repair— for free or for only a few
dollars.
Correcting Credit
report errors
You have the right, under the Fair Credit Reporting Act, to dispute the
completeness and accuracy of information in your credit file.
When a credit-reporting agency receives a
dispute, it must reinvestigate and record the current status of the disputed
items within a reasonable period of time, unless it believes the dispute is
“frivolous or irrelevant.”
If the agency cannot verify a disputed item, it must delete it. If your credit report contains erroneous information, the agency must correct it. If an item is incomplete, the agency must complete it. For example, if your file showed late payments, but failed to show you no longer are delinquent, the agency must show that your payments are now current. Or if your file listed an account that is not yours, the agency would have to delete it. Also, at your request, the credit-reporting agency must send a notice of correction to anyone who has checked your file in the past six months. If a reinvestigation does not resolve your dispute, the Fair Credit Reporting Act permits you to file a statement of up to 100 words to explain your side of the story. That explanation must be included in every report the agency sends. This is real credit repair!
Registering a dispute
To dispute information in your credit report, directly notify the
credit-reporting agency. Submit your dispute in writing, along with copies
(not originals) of documents supporting your position. Besides providing your complete name and
address, your letter should clearly identify each disputed item, explain why
you dispute the item, and request deletion or correction. This is how you do
credit repair. You may want to
enclose a copy of your report with the questionable items circled. Send your dispute by certified mail — return
receipt requested. Keep copies of your credit repair dispute letter and enclosures to
document what the agency received.
- Each of the nationwide consumer reporting
companies — Equifax, Experian, and TransUnion — is required to provide you
with a free copy of your credit report, at your request, once every 12
months. The three companies have set up a central website, a toll-free
telephone number, and a mailing address through which you can order your
free annual report. To order, visit annualcreditreport.com, call
1-877-322-8228, or complete the Annual Credit Report Request Form and mail
it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA
30348-5281. You can print the form from
ftc.gov/credit.
Do not contact the three nationwide consumer reporting companies
individually. They are providing free annual credit reports only through
the above contact points. You may order your reports from each of the
three nationwide consumer reporting companies at the same time, or you can
order your report from each of the companies one at a time.
- You can dispute mistakes or outdated items for free to begin your credit repair. Under the FCRA, both the consumer reporting company and the information provider (that is, the person, company, or organization that provides information about you to a consumer reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the consumer reporting company and the information provider.
Need Help? Don’t Despair
Just because you have a poor credit report doesn’t mean you won’t be able to
get credit. Creditors set their own credit-granting standards and not all of
them look at your credit history the same way. Some may look only at more
recent years to evaluate you for credit, and they may grant credit if your
bill-paying history has improved. It may be worthwhile to contact creditors
informally to discuss their credit standards.
If you’re not disciplined enough to create a workable budget and stick to
it, work out a repayment plan with your creditors, or keep track of mounting
bills, consider contacting a credit counseling organization. Many credit
counseling organizations are nonprofit and work with you to solve your
financial problems. But not all are reputable. For example, just because an
organization says it’s “nonprofit,” there’s no guarantee that its services
are free, affordable, or even legitimate. In fact, some credit counseling
organizations charge high fees, or hide their fees by pressuring consumers
to make “voluntary” contributions that only cause more debt.
Most credit counselors offer services through local offices, the Internet,
or on the telephone. If possible, find an organization that offers in-person
counseling. Many universities, military bases, credit unions, housing
authorities, and branches of the U.S. Cooperative Extension Service operate
nonprofit credit counseling programs. Your financial institution, local
consumer protection agency, and friends and family also may be good sources
of information and referrals.If you are considering filing for bankruptcy, you should know about one
major change to the bankruptcy laws: As of October 17, 2005, you must get
credit counseling from a government-approved organization within six months
before you file for bankruptcy relief.
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions. with a little hard work and homework you can succeed at credit repair.
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