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How-to Guide on Credit Repair

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If you find that your credit score is low or you have been turned down for a loan due to your credit, take a look at your credit report.  Is all of the information accurate?  Are there multiple entries for the same debt?  Is the debt even yours?  You may find that information in your file is not entirely accurate or that you are in need of credit repair.

There are a multitude of companies that offer to fix your credit for you, some reputable and some, well, not so much.  Before considering paying for credit repair, you need to identify the extent of the problem.  In some cases, you may need the help of a professional who can provide legal and financial expertise.  But if it’s a simple misunderstanding that can be cleaned up, you may want to do it yourself at little or no cost.  BCA offers some steps to take to dispute information on your credit report and tips to help cope with debt.

How to Do-It-Yourself

Almost anything a credit repair company can do legally, you can do for yourself.  Federal law entitles you to a free credit report annually, and also in cases where you have been turned down for credit, denied employment or insurance due to credit issues, or under certain circumstances.  Start by ordering your credit report online at annualcreditreport.com or by calling 1-877-322-8228.  If you find inaccurate or outdated information or mistakes, it doesn’t cost anything to dispute them.  Contact both the provider of the information and the credit reporting company to file a dispute.

Inform the credit reporting company in writing of the information you believe is inaccurate.  Include your name and address and direct the letter to the complaint department of the reporting company.  Your letter should:

a)      identify each item in your report that you dispute

b)      clearly state the facts and reasons you dispute the information

c)       ask that it be removed or corrected

Enclose copies (NOT originals) of any documents that support your position and perhaps a copy of your report with the items in question highlighted.  Send the letter by certified mail, “return receipt requested,” and keep copies of your dispute letter and enclosures.  (A sample letter is available.)

Generally, credit reporting companies must investigate the questioned items within 30 days.  They will forward all the relevant data you provide about the inaccuracy to whoever provided the information.  The information provider then must investigate, review the relevant information, and report the results back to the credit reporting company.  If the disputed information is inaccurate, the credit reporting company(s) must be notified so your file can be corrected.

The results of the dispute must be sent to you in writing, along with the name and contact information of the information provider, and a free copy of your credit report if the dispute results in a change.  The credit reporting company cannot put disputed information back in your file unless the information provider verifies that it’s accurate and complete.  If you ask, the credit reporting company must send notices of any correction to anyone who got your report in the past six months.  You can also have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.

If the investigation doesn’t resolve your dispute with the credit reporting company, you may ask that a statement of the dispute be included in your file and in future reports.

You should also contact the creditor or other information provider, in writing, regarding the disputed information.  Include copies (NOT originals) of documents that support your position.  Make certain it is sent to the correct address for disputes and send it by certified mail “return receipt requested”.  Keep a copy of what is mailed.  If the provider reports the item to a consumer reporting company, it must include a notice of your dispute.  And if the information is found to be inaccurate, the provider may not report it again.

 

If the Negative Information is Accurate

A credit reporting company can report most accurate negative information for seven years (10 years for bankruptcy).  Take hold of your finances and make strides to improve your credit.  Create a budget and stick with it.  Determine what you can afford to pay your creditors and try to work out a payment plan or negotiate with them to resolve the debt.

Consider speaking with a non-profit credit counseling and government-approved organization that can work with you to resolve your financial problems.  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 can help you develop a personalized plan to solve your money problems.  Be aware that they may charge a fee for their services.  Do your research to ensure you are dealing with a reputable company.

For more information, visit BCA’s Resource Guide on Credit Repair.

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About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.