The truth is: as long as the information is accurate and timely on your credit report, no one can legally remove negative items. Anything a credit repair clinic can do for you, you can do for yourself at little or no cost. The law allows you to ask for an investigation of information that you feel is inaccurate. In addition to this there cannot be a charge for you to dispute mistakes or outdated items. Under the Fair Credit Reporting Act (FCRA), the consumer reporting company (company like TransUnion, Experian etc) and the information provider (that is, the organization that provides you credit) are responsible for correcting inaccurate or incomplete information.
Disputing an Item
- Tell the consumer reporting company, in writing, what information you think is inaccurate
- Include copies, NEVER originals of documents that support your claim
- Provide your complete name and address in the letter and clearly identify each item in the report you are disputing
- Send your letter by certified mail, "return receipt requested," so you can document what the consumer reporting company received
- Always keep copies of your dispute letter and enclosures
Consumer reporting companies are required by law to investigate the items in question - usually within 30 days - unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it must investigate, review the relevant information, and report the results back to the consumer reporting company. If the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer-reporting companies so they can correct the information in your file.
When the investigation is complete, the consumer reporting company must give you the results in writing and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the consumer reporting company cannot put the disputed information back in your file unless the information provider verifies that it is accurate and complete. If you request, the consumer reporting company must send notices of any correction to anyone who received your report in the past six months. You can have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes.
If an investigation doesn't resolve your dispute with the consumer reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the consumer reporting company to provide your statement to anyone who received a copy of your report in the recent past. You can expect to pay a fee for this service.
Bad Credit? Don't Despair. Help is Still Available
Just because you have a poor credit report doesn't mean you won't be able to get credit. Creditors set their own credit-granting standards and not all of them look at your credit history the same way. Some may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved.
Repairing credit requires discipline.
Create a workable budget and stick to it. Work out a repayment plan with your creditors.
Consider contacting a credit counseling organization.
Many credit-counseling organizations are nonprofit and work with you to solve your financial problems. But not all are reputable. In fact, some credit counseling organizations charge high fees, or hide their fees by pressuring consumers to make "voluntary" contributions that only cause more debt. Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems.
If you are considering filing for bankruptcy, you should know about one major change to the bankruptcy laws: As of October 17, 2005, you must get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations atwww.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees.
For more information, see the credit information web site from the Federal Trade Commission.www.ftc.gov/credit