Credit repair companies offer to improve your credit by spotting mistakes and disputing items found on credit reports. While they may claim to have proprietary methods to improve credit, the truth is that credit repair companies cannot do anything you can’t do for yourself for free or at minimal cost. If you’ve hired a credit repair business and don’t see any results, under Federal law you have the right to cancel services. Let’s discuss credit repair and some tips to help you manage your credit reports.
First off, no one can legally remove accurate or current information from your credit report. If you have debt, only time and paying the debt will improve your credit. Paying debts on time over time will help your credit score.
Beware of any credit repair company that charges you before they help. This is illegal. In addition to being prohibited from charging advance fees, credit repair organizations must provide credit repair contracts in writing and inform consumers of their right to cancel services. They must provide written details of the services to be performed, how long the process will take, the cost of services, and any guarantees made. Credit repair companies cannot misrepresent or overstate the extent of their services.
Avoid any credit repair company that:
- Demands payment before completing services
- Provides incomplete or inaccurate information
- Tries to pressures you to buy before you check out the offer
- Tells you to avoid contacting the credit reporting bureaus (TransUnion, Experian, and Equifax) directly
- Tells you to dispute accurate information found on your credit report
- Don’t explain your legal rights
- Coerce you to lie on credit or loan applications
Federal law gives credit repair clients the right to see results before paying. Businesses that use telemarketing to sell credit repair services have to meet certain requirements before they can charge for services. Before charging any fees, the company must:
- Achieve the results promised within the time frame they stated
- Give you a consumer report generated more than six months after the results were claimed to have been achieved, showing the results
You have the right to cancel services at any time, without penalty. Some states, such as California, require credit service organizations to be registered and post a bond.
Handling Your Credit
Your credit score determines if you can get a loan or credit card, your interest rate, and other terms of the agreement. It can also affect whether you can rent a home, obtain a job, or insurance. Your credit score is based on information from your credit report.
Check your credit report frequently to ensure the information is accurate. Each of the nationwide credit bureaus will give you a free copy of your credit report once every 12 months if you ask for it at AnnualCreditReport.com, or by calling (877) 322-8228.
If you find a mistake on your report, contact the credit bureau and the company that provided the information to ask that they correct their records. Provide them with as much detail as possible, along with your supporting documents (e.g., payment records or court documents).
If you are a victim of identity theft, contact the three main credit reporting bureaus for assistance. Here’s how to contact them:
- Equifax - 1-888-Equifax (1-888-378-4329) or P.O. Box 740256, Atlanta, GA 30374
- Experian - 1-888-EXPERIAN (1-888-397-3742) or P.O. Box 4500, Allen, TX 75013
- Transunion - 866-744-8221 or P.O. Box 2000, Chester, PA 19016-2000
It’s important to report scams. Start with filing a complaint with Business Consumer Alliance (BCA). We will reach out to the business for a response and publish your complaint for others to see and be warned about the scam. You can also file a fraud report with the Federal Trade Commission.
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