The Legalities of Credit Repair
A bad credit report can be an obstacle in the way of securing credit, obtaining a lease, and even being offered a desirable job. Since a credit report is designed to be an accurate depiction of a person’s credit and payment history, most creditors consider credit reports to be good ways to judge an applicant’s aptitude for prompt payments. Many consumers find themselves at one time or another in need of some credit repair so they can secure the credit they need.
There are laws in place that define what credit reporting agencies can list on a credit report, how long the items can stay on the report, and who has access to the reports. These same laws also protect the consumer in many ways. The Fair Credit Reporting Act and subsequent updates allow consumers to dispute certain items reported on their credit reports. This law isn’t out to help people who think the reporting is unfair, but rather to assist people with bona fide errors on their reports to get them removed.
A problem arises, however, when unscrupulous companies use aspects of the Fair Credit Reporting Act to swindle consumers into thinking accurate items on credit reports can be removed just by employing the company to petition the reporting agency. Here is a word to the wise: stay away from companies, which claim to be able to remove delinquent accounts from credit reports. Legally, and ethically for that matter, a person is obligated to pay debts and if the debts aren’t paid there is no reason why these delinquencies shouldn’t be noted on a credit report. Any company who claims to be able to erase these accurate items on credit reports is not doing so in an ethical manner. Basically, they are reporting the items as errors and demanding that the items be removed from the credit report.
Legally, the credit reporting agency is obligated to remove the items while an investigation into the accuracies of the items is accomplished. So although it appears as if the company kept its promise by getting the items removed, the investigations eventually prove the items accurate, the items are reinstated onto the credit report, and the consumer is out whatever money they paid the company to remove the items in the first place. Not a good deal.
Credit repair is very different for people with bona fide errors on the credit report. Errors can arise from something as simple as a mix up with names to as complex and dramatic as fraud and identity theft. If errors are a result of simple mistakes, the consumer has the right to contact the credit-reporting agency and notify them of the mistakes. It is up to the reporting agency to investigate the errors and correct them if appropriate. If, however, the errors arise from something like identity theft the process gets a little more multifaceted. It is up to the consumer to prove in one way or another that identity theft has occurred. Sometimes something as simple as a police statement will suffice, although some consumers are reluctant to report such fraud to the authorities, especially if a relative or friend did the fraud. It makes sense that the reporting agency would request a police report though; without one there is no way to prove the outstanding debt on the credit report wasn’t just the result of an overzealous shopping spree.
Some consumers can get quite frustrated when attempting to repair their credit because the credit reporting agencies will often seem hard to work with. It is important to keep in mind that the main customer of these agencies is not the solitary consumer, but rather the many lenders who utilize their services. It is wise to approach the situation with as much documentation as possible, in addition to a little drive and persistence. Yes, legally, the reporting agencies are obligated to investigate and correct errors, but they are notorious for not being particularly great with their customer service capabilities.
Credit repair can be a long and tedious process, but there are many laws in place that protect the consumer. The need to repair credit is a steadily common need, so a consumer feeling overwhelmed can take solace in the fact that they aren’t the only one having to navigate through the intricate web of rules and regulations.
This finance and business information is provided "as is". The author, publishers and marketers of this information disclaim any loss or liability, either directly or indirectly as a consequence of applying the information presented herein, or in regard to the use and application of said information. No guarantee is given, either expressed or implied, in regard to the merchantability, accuracy, or acceptability of the information.