What is credit repair?
The aim of credit repair is to help rebuild your credit history. Even if you’re doing everything right (paying your bills, keeping balances low), it can be difficult to improve your score if there are any past delinquencies showing on your credit report. Using the Fair Credit Reporting Act (FCRA), you can dispute information directly with the credit bureaus and forcing them to open an investigation into items you disagree with.
What is the Fair Credit Reporting Act (FCRA)?
The FCRA affords you the following protections:
You must be told if information in your file has been used against you. Any credit or consumer report used to deny credit, insurance, or employment must inform you and provide the name. Address, and phone number of the agency that gave that information. You have the right to know what is in your file.
You can request all information that pertains to you in the files of a consumer reporting agency if you provide proper identification. You’re entitled to a free file disclosure if:
- a person has taken adverse action against you because of information in your credit report
- you are the victim of identity theft and place a fraud alert in your file
- your file contains inaccurate information as a result of fraud
- you are on public assistance
- you are unemployed but expect to apply for employment within 60 days.
You are also entitled to a free file disclosure every 12 months. You can request one here: https://www.annualcreditreport.com/
You have the right to ask for a credit score. Credit Scores are numerical values calculated using information obtained from the credit bureaus. You can purchase a credit score, but many can be obtained for free. Lenders use this score to evaluate credit-worthiness when you are applying for credit
You have the right to dispute incomplete or inaccurate information. Any information in your file that you think is incomplete or inaccurate, you can report it to the credit reporting agency and they must investigate (provided the dispute is not deemed frivolous
Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information. Following an investigation, the information must be corrected. If the information has been verified as accurate, they may still report the information
Consumer reporting agencies may not report outdated negative information. In most cases, a consumer reporting agency may not report negative information that is more than seven years old, or bankruptcies that are more than 10 years old.
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You must give your consent for reports to be provided to employers. Without written consent, a consumer reporting agency cannot give information to employer or for employment application purposes
You may limit “prescreened” offers of credit and insurance you get based on information in your credit report. Any unsolicited offers for credit or insurance due to “pre-screening” must include a toll-free contact number to remove your information from the lists used for these offers. You can opt out at 1-888-5-OPTOUT (1-888-567-8688)
You have a right to place a “security freeze” on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. This is designed to stop credit loans and services from being approved in your name without your consent, though it’s worth noting that this may affect the timely approval of any valid applications you yourself submit. You may also put a fraud alert on your account instead that requires businesses to take extra verification steps before approving new credit applications. An initial fraud alert can last for 1 year, but if you are a victim of identity theft you are entitled to an extended fraud alert which lasts 7 years.
You may seek damages from violators. You may be able to pursue legal action against consumer reporting agencies or consumer report users that violate the FCRA
Can Credit Repair help me?
If there is negative information on your credit report that you disagree with, you may be a good candidate for credit repair. If this process seems intimidating or you aren’t sure where to start, you can also hire a credit repair company. There are companies like Credit Saint that will challenge the damage you disagree with, and set you up with a plan to build positive credit. The credit bureaus will then investigate the challenges received and press your creditors to defend the items placed in your history that you disagree with.
We like Credit Saint because they offer a 90-day money-back guarantee and they offer custom disputes. They also have a top rating with the Better Business Bureau.