What is Credit Repair and Is it Legal?

 

Credit repair is a term that is used to refer to the process/procedures taken or applied in order to turn a bad credit report into a good one. This repair process, also known as restoration, could be done by deleting negative/incorrect information from one’s file and taking proactive steps to adjust one’s expenses in order to raise one’s score. The act itself is also known as fixing one’s credit.

Is credit repair legal?

More and more people are having vehicles repossessed, having their homes foreclosed upon, and falling behind on the payment of their bills. Many consumers, therefore, are looking for ways to improve their credit scores and are questioning if credit repair is legal. The short answer is “yes,” credit repair is legal. Credit repair is your right, is mandated by Congress through legislation that has been passed and improved upon for several decades and regardless of the myths out there you may here, there is nothing illegal about it all.

A quick internet search will provide you with the websites of a multitude of companies who profess to rebuild your credit for a fee. These companies may seem to be a wish come true to those who suffer from bad credit and want to increase their credit score.

Though there are some companies who will do little to improve your credit and certainly cannot live up to their outlandish claims, there are some companies who can help improve your credit and will do so legally.

Some companies may boast that they can remove bankruptcies and court judgments from your credit report. What you need to know it that this can only be done legally if there is a valid reason for doing so, such as the bankruptcy was entered against you in error, i.e. the bankruptcy belonged to someone else. If you have actually declared bankruptcy, then it will most likely remain on your credit report for up to ten years. It is never legal to remove accurate and true information. Take a look at some of the important stipulations that these companies are required to adhere to;

  • A clear and detailed contract must first be received by the individual seeking credit repair services prior to any repair company performing services for them. It is typical for these contracts to include a description of services to be performed, payment for these services and time frame for completion.
  • Repair organizations are never permitted to ask for payment prior to providing service to an individual. Any company that asks for upfront payment for their services should be shied away from, as these could be potential scams.
  • Companies should never alter the identity of their users or attempt to illegally alter their credit history. All preparation services should be performed within the confines of the law, never misrepresenting the client or their history.
  • Services that are provided to any individual by a credit preparation company can never be misrepresented. This means that the services provided by the company must be those that are discussed with the individual seeking their services, no less.

In reality, the best advice regarding credit repair is to do it yourself. You can accomplish everything these companies can if you have the desire and knowledge to do so. You can try to repair your credit legally. To begin, you will need to obtain a copy of your credit report, which you can do by contacting one of the three major credit reporting bureaus (Experian, Equifax, or TransUnion). These three credit reporting agencies are legally bound to provide you with one free copy of your credit report each year, upon your request.

Once you receive a copy of your credit history, you should sit down and review it carefully. You need to check all information on the credit report for false or inaccurate information. If anything is incorrectly reported, you should write the credit reporting bureau and request that the inaccurate or false information be removed or revised. You will need to provide the credit reporting agency with any documentation which substantiates your claim. Be sure to retain copies of all correspondence to and from the credit reporting agency.

So, is credit repair legal? Yes. Credit repair is legal, ethical and 100% within your rights.