Does Credit Repair Really Work?
Credit repair usually refers to the process of getting rid of negative entries on TransUnion, Experian and Equifax credit reports. The information no longer influences lenders or hurts your credit score when it is erased, thus "fixing" your credit. You cannot remove 100 percent of the harmful items on your reports, but you can often get rid of enough to make a difference, according to the Divorcenet legal information website.
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Explanation
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The credit bureaus have a right to report accurate information on your credit reports, even if it is negative. This includes everything from payments that are only one billing cycle late to collection agency activity and home foreclosures. Sometimes lenders report erroneous information or the bureaus make inputting errors, resulting in mistakes. This opens negative entries to possible deletion because the Federal Trade Commission (FTC) explains that you are entitled to dispute every mistake you can find, and the credit bureaus have to delete anything they cannot confirm as completely accurate.
Process
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The FTC explains that you are legally entitled to inspect your credit reports annually for free. The bureaus provide no-obligation copies through AnnualCreditReport.com and have dispute forms on their websites to report any errors. Divorcenet advises that you can dispute even minor mistakes. For example, you can challenge an incorrectly spelled creditor name, a date that is off by a day or two, or a credit limit that is actually a few dollars more or less than what is being reported. Effective repair means finding as many disputable points as possible.
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Outcome
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Some lenders will verify or correct the disputed information, but Divorcenet explains that many ignore credit bureau validation requests and sometimes the bureaus do not even send an inquiry during busy periods because they only have 30 days to complete their investigations. The Fair Credit Reporting Act (FCRA) dictates that unverified information must be pulled from reports. Your disputes are likely to result in the removal of at least a few negative items from your credit bureau records.
Warning
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The FCRA discourages overly aggressive credit repair by excusing the credit bureaus from handling obviously frivolous disputes. The FTC recommends avoiding problems by providing backup documents, such as receipts, with disputes. Send the information through the mail rather than using online forms. Go into detail about every item you challenge instead of making generic accusations like, "The amount is wrong" or "The dates are off." For example, state, "The limit on this account is really $5,000, as shown by the enclosed statement, not the $6,000 shown on my credit report."
Assistance
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Some firms run ads offering credit repair assistance, but the FTC warns that they cannot legally do anything that you can do for yourself. Some simply want to charge money for doing free activities like filing disputes, while others use illegal tactics like establishing a new credit identity for you or disputing truthful information. You can lose money or get into legal trouble if you work with an unscrupulous company.
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