Protect Yourself from Credit Repair Scams

With many still struggling in today’s economy, consumers are often looking for a way to repair their credit score quickly as more businesses are turning to such reports for everything from employment to apartment rentals. For this reason, many companies have cropped up that offer credit repair for a fee. The companies claim they can “remove negative items from your credit report” or that you can “create a new credit identity.” These claims are not only false, but may actually be illegal. For some, debt consolidation plans are the best option for helping to rebuild credit as these types of plans assist consumers in sticking to a repayment plan. For others, being patient and diligent regarding information that is on their credit report can improve credit.

Removing Negative Items

Any company that claims they can remove legitimate negative items from a credit report is making a false statement. The fact is that credit reporting agencies report negative information for seven years from the date of the delinquency. In most cases, court judgments and bankruptcies can be reported for up to 10 years. However, if a negative item has been placed on a credit report in error, the consumer has rights regarding the removal of the item. To dispute a negative item on a credit report, consumers should contact the credit bureau, in writing, to dispute the item. The letter should include the name of the company that reported the negative information, the reason the consumer feels the information is inaccurate and copies of any documents supporting the belief that this is an error. The letter should be sent certified mail; return receipt requested so that the consumer has a record that the reporting agency received the correspondence.

Contact the Creditor

In addition to contacting the credit reporting agency, consumers should file a dispute with the creditor who reported the negative information as well. Send the dispute certified mail, return receipt requested to the address listed in the credit report with the same documentation sent to the credit reporting agency. Request that the creditor provide proof that the debt is accurate in the form of signed agreements or other documentation verifying that the debt is valid. The law requires that creditors provide consumers with validation of any debt that is reported to a credit reporting agency within 30 days of receiving such a request.

Credit Bureau Responsibilities

Once the credit reporting agency receives the correspondence, they must investigate the items in dispute within 30 days. Once the investigation is complete, the credit bureau must provide the consumer with the results as well as a copy of an updated credit report if the information has changed. It may take several dispute letters to have a negative item removed from a credit report. If the reporting creditor provides validation for the debt that the consumer still feels is inaccurate, a statement regarding the dispute may be provided to the credit bureau for inclusion in any future reports.

Debt consolidation companies can help consumers stick to a debt repayment plan, but they cannot repair credit. If a credit report contains inaccurate information, the consumer can request correction without assistance from a credit repair company at no cost.