The most common concerns we hear from individuals looking to hire a credit repair agency is:
1. Are they legal?
2. How do credit repair companies work?
One easy way to determine if a credit repair company is legitimate. Is if they tell you upfront they are compliant with the Credit Repair Organizations Act (CROA).
- They can not make any guarantees
- They must work within federal laws
- They can not manipulate your identity or use deceptive tactics
How Do Credit Repair Companies Work?
There are two ways credit repair agencies work to rebuild your credit. The first is removing bad credit items, and the second is building good credit information on your credit history.
1. Dispute Bad Credit Items
Credit repair agencies will typically start by challenging items on your credit report. There are strict federal laws that govern what information can be listed on your credit report. You can challenge items on your credit report by disputing the credit bureaus directly.
This is something you can do yourself. However, many individuals give up trying to deal with the bureaucracies of three separate credit bureaus. The Fair Credit Reporting Act entitles you to dispute any item on your credit report that you believe is questionable. In other words, you can dispute any listing on your credit report as long as you believe it is incorrect.
Once the credit bureaus get your dispute and decide it is a valid dispute. Then, they will investigate the item on your credit report. This includes contacting the collection agency or lender that reported the bad credit to ask for verification of the account information.
If your account is not verified. Then it must be removed from your credit report. This is in compliance with the Fair Credit Reporting Act. If an item is verified. Then, the account information may be updated on your credit report.
2. Dealing With Collection Agencies
The Fair Debt Collection Practices Act (FDCPA) is another federal law credit repair agencies will use. Most commonly this will be used to request debt validation on your debt account in collections. When you request debt validation, the collection agency must respond by providing you with evidence proving they own your debt account.
The Federal Trade Commission reports issuing fines to many collection agencies for violating the Fair Debt Collection Practices Act. Often these fines are because debt collectors have ignored consumers validation requests. If the collection agency is able to validate your debt.
You will need to negotiate a settlement payment to delete bad credit. However, if the collection agency is unable to validate your debt. Then you are no longer legally responsible for repayment. And the debt collector will notify the credit bureaus to erase bad credit about the debt.
Should the collection agency ignore your validation request and not remove negative credit from your credit report. We strongly suggest hiring an expert credit attorney. If your rights have been violated the debt collector could be liable for up to $1,000 in damages.
These two credit repair laws are the tools that a legit credit repair agency will use to fix your bad credit. It will speed up your credit repair progress if you are building credit too. It is key to a good credit score that you have a positive payment history on your credit report.
When all is said and done your credit score is a lot like your cumulative grade point average, in school days yonder. It matters not if you’re acing all your other classes, but failing home economics. Your GPA is totally jacked up because you can’t bake a cake.
This exact same idea is true of your credit score. The dings, negative, and derogatory items, are exactly like flunking home ec. It’s imperative, we clean up your credit report and remove those less than stellar marks.
Did you know in 2016 alone over 9 million negative items were removed from consumer’s credit reports? This is why we encourage our members to consider professional, legal, and legitimate credit restoration companies to help.
One of the best credit repair companies is The Credit Pros. They’ve successfully helped client’s remove late payments, collections, charge offs, judgements, liens, and many more items. For further check out our full The Credit Pros reviews article.
Get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more tips, techniques, and strategies on how can I fix my credit score with Dan Willis, sign up for our free newsletter and join our congregation.
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