Bad Credit Repair Companies Can't Deliver On Their Promises |
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With the proliferation of
credit repair agencies that are all promising to help the consumers to get out from their debts with bad credit repair, you can easily get carried away with their unachievable promises of removing negative information from credit reports. However, it is very important to know that it is impossible to remove correct negative information from the credit report and you can do yourself what the bad credit repair company will charge you a lot of money for. These companies claim that they can do the following: Remove correct but negative information from your credit report: Credit bureaus are obligated by law to verify information if the consumer disputes it. Moreover, if they cannot verify it within 30 days of receipt of the dispute letter, they have to remove the information from the credit report. Bad credit repair services take advantage of this legal provision and advise the consumers to challenge almost every item in the credit file, whether it is negative, positive or neutral. This deluge will overwhelm the credit bureaus and being unable to cope with this excessive work, they will tend to remove the information without verifying it. This is only a temporary removal, as most correct information must reappear after 30-60 days when the creditor that first reported the information re-reports it. Moreover, credit bureaus have the right, under the Fair Credit Reporting Act, to dismiss the disputes on the ground that they are frivolous. It is, therefore, better to scan the credit report and dispute only the outdated, incorrect and ambiguous items. You should be aware of the fact that correct information, even if it is negative, can legally stay in the credit file for seven or ten years, depending on the type of information. You can request an investigation or reinvestigation of the facts and information in your credit file without any charge. Get outstanding debt balances and County Court judgments removed from your credit file: Bad credit repair companies advise their customers to clear their outstanding debts in exchange for removal of negative items from the credit report, if the creditor agrees to the same. You can negotiate this with the creditor yourself without the help of the credit repair clinic, which would charge you a hefty up-front fee for this advice. According to the FTC, the bad credit repair companies cannot fulfill the promises and claims that they make. Mostly, these companies charge thousands of dollars in up-front fees and they do nothing to repair your bad credit and are untraceable after some time. The law, however, is very clear regarding the obligations of the bad credit repair organizations. According to the Credit Repair Organizations Act, these organizations are not allowed to make false claims and charge any fees until they carry out the services that they have promised. They should also inform consumers about their legal rights in a written contract which should include notification of all services performed, the time it will take to execute these services, total cost, any guarantees, and an explanation that consumers have three days to cancel the service at no charge. The Fair Credit Reporting Act of 1971 allows consumers to challenge the accuracy, validity and verifiability of their credit reports, free of charge. Credit bureaus are obligated to investigate disputed items and to correct or remove inaccurate or unverifiable information. There is no magic wand that can repair your bad credit report with a swish of the hand and most claims of the bad credit repair companies are impossible to achieve. It is better to contact a reputable, nonprofit credit counseling organization that can help you arrange a repayment plan, which will enable you to rebuild your credit by making consistent monthly payments. The golden rule is that you can do yourself what bad credit repair companies promise to do. You should beware of their promotions of credit cards that promise to get you credit and build your credit rating even if your credit history is poor. |
