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Credit Repair Services > Credit Repair Services: Do Not Pay For What You Can Do Yourself
Credit Repair Services: Do Not Pay For What You Can Do Yourself |
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You might question the utility of the credit repair services if your credit report has been in a good shape so far. There will always be many consumers having difficulty making timely payments to creditors and similarly there will always be instances of creditors and credit bureaus making mistakes with credit records. In both these cases, consumers will have the onerous task of improving their credit or getting the inaccuracies corrected or removed from their credit records. Some consumers who will naturally turn to credit repair services for help should be aware that these services cannot ask for payment until they have completed the work that they had promised to do. Many of these services indulge in misleading advertisements such as Erase Bad Credit! or Remove Bankruptcy and Liens from Your Credit File! and charge large sums of money to repair or improve your credit and try to misinform the consumers that damaging information in credit files--even if it's accurate --can be removed. It is important to know that accurate information cannot be removed by anyone until the legal time limit as governed by the Federal Fair Credit Reporting Act has expired. This time limit is seven years for reporting adverse information and ten years for reporting bankruptcies in credit reports. The Federal law makes it mandatory for the credit repair services to give you an explanation of your legal rights, a detailed written contract, and three days to cancel without paying any fee. This applies to for-profit services but does not apply to non-profit organizations, banks and credit unions or the creditors themselves. If you still want to hire a credit repair service, you should know that financial institutions, department stores and other creditors report your credit-worthiness, credit standing and capacity, credit history and general character to credit bureaus that collect and maintain all such information. Your credit file can be purchased by potential creditors, employers, insurers or anyone who needs it for a legally approved purpose for a fee. Consumers should not pay upfront fees for credit repair services until the repair service has been done, as this is illegal in most states. Credit repair services should offer written contracts along with details of the items that it expects to remove from the credit report and the time it expects to take to do its job. Its basic ploy is to ask the credit bureaus to verify every negative item in your credit report, whether accurate or not. The credit bureaus, as a rule, have to request creditors to verify the information and due to the large number of disputes, if there is delay beyond 30 days, the negative item will have to be deleted from the file. However, it will have to be restored if the credit bureau later receives verification from the creditor. Accurate items can never be permanently erased from your credit report by any of the companies that advertise credit repair services. However, your negative credit history can only be cured with time, irrespective of the circumstances under which it occurred. The Federal Fair Credit Reporting Act empowers you to dispute the accuracy or completeness of any information in your credit file and once you do that, the agency is legally obligated to reinvestigate the information, note its current status, and promptly inform you of the results of the investigation and what it has decided to do about the disputed information. You must ensure that your dispute is well authenticated as the reporting agency might ignore frivolous disputes which form a part of the repair tactics of the credit repair services. If the dispute is not resolved by the reinvestigation, you can submit a 100-word statement, giving your side of the story, at no cost. All future reports will have to carry this statement. If the reporting agency reasonably believes that the dispute is frivolous, then the above does not apply. You can do, for free, what the credit repair services claim that they can do at a high cost, which can run into hundreds of dollars. So, you should not be misled by them and try to do it yourself. |
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