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Credit Repair: Do It Yourself, Do It Right

By Gina Pogol
Mortgage Credit Problems Columnist


Chances are at least some of these claims have infiltrated your mailbox or your inbox:

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"Credit problems? No problem!"
"We remove bankruptcies, judgments, and liens from your credit report forever!"
"We can eliminate your bad credit--100% guaranteed."
"Create a new credit identity--legally."

The problem is, no legitimate credit repair outfit makes those claims, because there are limits to what can legally be done. You can improve your credit rating legally, but it does take commitment and time.

Credit Repair to Correct Errors

Sometimes a bad credit rating is deserved, but not always. And most credit files have at least some information that isn't accurate and may be derogatory. So here's what you do:

  1. Notify one or more credit bureaus (Experien, Equifax, and TransUnion) in writing of inaccuracies. In a letter, state the facts and the reasons you dispute the information, and ask that it be removed or corrected.
  2. Include copies (NOT originals) of any documents that support your position.
  3. You may want to enclose a copy of your report, and circle the items in question.
  4. Send your letter by certified mail, "return receipt requested," so you can document that the credit bureau received it.
  5. Keep copies of your letter and enclosures.

The bureau must investigate your dispute(s) within 30 days, unless they consider your dispute frivolous (this is to thwart credit repair companies that just dispute everything in the hopes that some items won't stick). They must forward information that you provide to the organization that provided the information. The creditor has to investigate and report the results back to the credit bureau. If the disputed information is inaccurate, the creditor has to notify the nationwide credit bureaus so they can correct it in your file.

When Your Credit Report Is Accurate

When your negative credit history is accurate, only time can improve it. A credit reporting company can report most accurate negative information for seven years and bankruptcy information for ten years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. The good news is that older items are weighted less heavily; new good history counts more than old bad history.

Extra Help for Big Problems

Sometimes, credit repair requires credit counseling, debt management, debt consolidation, or even bankruptcy. To find competitive debt consolidation loans, complete the form on this site--you receive multiple offers and can choose the best one. You may also need to seek out experts who can help you determine if you need heavy artillery in your fight to clean up the bad and establish the good.

But Avoid These "Helpers"

Despite the claims of some credit repair outfits, they can't legally improve your credit using the tactics they promote. No one can remove accurate negative information from a credit report. But while they may not be able to help you, these firms are always ready to take your money. Avoid those that want fees upfront before performing any repairs, promise to remove even accurate data from your file, don't advise you of your rights, or encourage you to create a new credit profile by applying for an Employer ID number to use instead of your Social Security number.

It's a federal crime to lie on a loan or credit application and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. Felony charges could follow, so don't take that risk.

Sources

http://www.fdic.gov/ / http://www.ftc.gov/

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