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Two Weapons to Clean Credit

One of the most common questions for folks researching credit repair services, is how exactly do credit repair companies work to legally clean up my credit reports? The purpose of this article is to explain precisely step by step how the professionals will work on your behalf to remove questionable, inaccurate, and misleading information from your credit history. This is key to improving your credit score.

By removing bad credit listings, we’re eliminating the items that are damaging and dragging down your credit score. You’ll also need to simultaneously build credit by paying your current bills on time and some folks choose to get a credit card for rebuilding credit. The plain truth is good credit requires a multifaceted approach both removing negative items and creating a trail of positive payment history.

1. Credit Report Dispute Process

The primary weapon for credit repair services is to deploy the credit report dispute process. This is your right granted by the Fair Credit Reporting Act (FCRA). This piece of federal legislation gives every consumer the right to dispute and challenge any item on their credit report, they believe to be questionable, inaccurate, or misleading.

This law also requires the credit bureaus to investigate consumer disputes. Naturally, removing bad credit is not as simple as filing a dispute with the credit bureaus. The cold harsh truth is the credit bureaus must spend money investigating consumer disputes.

This money is otherwise profit, and to many consumers surprise it’s bigger returns for the stock holders of two of the three major credit bureaus. To clarify whenever the credit bureaus avoid consumer disputes, they’re serving their company’s best interest.

This is why it’s so difficult to get the credit bureaus to find your dispute valid because only then will they investigate. Instead when they find consumer disputes invalid and avoid investigating an item, they’re saving money. After all they’re not earning revenue by removing errors from anyone’s credit report.

Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.

Don’t The Credit Bureaus Want Accurate Information?

You’d think so, but contrary to the popular false belief the credit bureau don’t give a flip about the accuracy of the listings contained on your credit report. The only reason they do investigate consumer disputes is to avoid being fined by the Federal Trade Commission (FTC).

Many folks are shocked to learn the FTC has fined all three of the credit bureaus and multiple times. The most alarming was just a few brief years ago, when the credit bureaus were required to install toll-free phone numbers to handle consumer disputes.

Yet the credit bureaus were not required to hire staff members to actually answer the phones, and thus consumers waited on hold unreasonable amounts of time, to put it mildly. Of course the FTC stepped in again and fined all three of the major credit bureaus collectively over one million dollars. This translates into about fifteen minutes of revenue for the credit bureaus.

This is just an example of the difficulty every consumer encounters when trying to fix bad credit on their credit reports. It’s far from a consumer friendly process, and it’s as difficult as going to your local grocery store and persuading the cashier to give you one dollar out of the register. Not too likely especially when you’re asking with a letter, over the phone, or online.

You can do this yourself, however the most frequent consumer dispute response from credit bureaus is to request additional information from you. This will happen regardless of their need for it. The critics believe this is nothing more than a stall tactic, in hopes of convincing you to just give up and live with bad credit.

In fact if you turn back the hands of time, you’ll see the credit bureaus have only recently begun offering consumer products and services. Prior to this, the bureaus simply collected information about you, and sold that to creditors and lenders.  In other words the credit bureaus customers were other businesses.

As Elizabeth Warren pointed out in her popular documentary movie Maxed Out, lenders earn more revenue from customers with a less than perfect credit history. This means that lenders prefer customers with blemishes on their credit reports because they can charge higher interest rates, and generate the most money.

Look, the credit bureaus earn the vast majority of their revenue from selling the information they collect about you to lenders and creditors. Clearly you can see how it’s in everyone’s best interest for you to have derogatory items on your credit report. That is everyone’s interest except yours.

This is why congress passed the FCRA way back in 1970, to protect consumers against the credit bureaus, lenders, and debt collectors. You’re exercising your right by disputing questionable listings on your credit report!

Many people falsely believe it’s illegal to dispute accurate items on your credit report, or that somehow consumers can face legal consequences for exercising this right. In over four decades since the original passage of the FCRA, not one consumer has ever faced any legal or criminal prosecution for disputing any item on their credit reports.

You see in countless consumer lawsuits against the credit bureaus, no one has yet to clearly define exactly what an accurate item on your credit report actually is. In fact the judges in these cases will always error on the side of the consumer, and they’ll typically take a common sense approach.

For example if you’re going through a divorcee and as part of the proceedings your ex-spouse is suppose to pay a credit card bill but neglects to do so. Is it accurate for that item to be placed on your credit report, especially if you’re not the one that was court ordered to pay that bill?

Further if you’re not notified of the delinquency, it’s impossible to take action and make sure it’s been paid. So then does you’re ex-spouse’s lack of financial responsibility dictate your credit worthiness? It shouldn’t but often it does.

Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.

2. Debt Validation

The second most popular weapon legitimate credit repair companies will deploy to clean your credit report is the validation process, with any open debt collection accounts. If you’re being contacted by aggressive debt collectors demanding payment from you, you should always request debt validation.

This requires the collection agency to furnish you the paperwork, documents, and evidence that proves they’re the legal rights holder on your account. If they don’t do this then you’re no longer legally responsible for repayment, and the collection agency is suppose to notify the credit bureaus and request they remove collections from credit report files they’ve reported about you.

If your debt is validated and it’s within the statute of limitations, the legal time period for which you’re responsible for repayment, then you should negotiate a settlement agreement. However it’s imperative that as a part of your contract you get the debt collector to agree that in exchange for your payment, they’ll stop reporting your account to the three major credit bureaus.

This way once you make your payment, you can file a credit bureau dispute. When the credit bureaus eventually find your dispute valid and investigate the item. They’ll contact the collection agency and ask them to verify the account, and any relevant details.

As per your settlement agreement the collection agency won’t verify your account during the credit bureau’s investigation. The FCRA says any item on your credit report the bureaus can’t verify must be removed.

Should you neglect to get this agreement upon your payment, the collection on your credit report will only be changed to a paid collection. This is not a positive item that will build credit.

Beware the collection agencies are required to validate consumer debt accounts, according to the Fair Debt Collection Practices Act (FDCPA). However there’s many debt collectors that have been fined for ignoring consumer dispute requests.

The unavoidable truth is as a consumer, you have the laws and the rights to clean credit report errors, inaccuracies, and misleading information. Yet many folks need the assistance of a professional credit repair service with an expert credit attorney on staff to force the collection agencies and credit bureaus to follow regulations, federal laws, and respect your rights.

Last Word

It’s true you can repair your credit yourself and should you choose this path, please exercise your organizational skills, patience, and don’t get frustrated and give up. Instead we encourage our members, friends, and family to investigate legitimate credit repair services.

These companies are familiar with the process and will do all the leg work on your behalf. You just sit back and collect the deletion letters from the credit bureaus as they remove negative items from your credit reports. Get a FREE credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596.