Credit repair organizations are sprouting up like weeds and have been since the Great recession. Americans are more conscious than ever before about the importance of having and maintaining good credit. Without it, you will be treated like a poor person at any bank where you apply for a loan, and you will pay much higher interest on any loan or credit you obtain.
This article hopefully accomplishes two things: first, you need to know that you can probably handle your own credit repair just as effectively as a credit repair organization. Second, it may be impossible to completely clean your credit report no matter what anyone tells you. Third, if you do hire a credit repair organization, please be sure that it is not doing anything to make your credit worse with underhanded tactics and approaches that the credit bureaus hate.
Common Myths About Credit Repair
It’s good to start with some common myths to clear these up.
- Myth: you can get any bad credit mark off of your credit report. Fact: if you really do owe the debt and you really were late, in default or in bankruptcy, then it’s likely that the bad mark will stay on your credit report even if you hire a credit repair organization. I hear advertisements where some credit repair organization promise to completely cleanse your credit report of all negative information. This is simply not possible. If a bank or a creditor verifies false information after you dispute it, it will most likely remain on your credit report.
- Myth: credit repair organizations have “secret techniques” to cleanse your credit that no one else knows. Fact: this is false. Some credit repair organizations utilize underhanded tactics which may cleanse your credit for a short time, but once the negative information comes back onto your credit report, it’s there to stay. Don’t believe any credit repair guy who claims to have some insider secret. Everything you need to know about legitimate credit repair can be found at the Federal Trade Commission website or at various places on my website, brennanlaw.com.
- Myth: if you cannot obtain good credit, you need to go to a credit repair organization. Fact: you probably do not need to go to a credit repair organization. Some real estate agents will want you to go to a credit repair organization if you are in the middle of a real estate loan and you need a very quick repair on some aspect of your credit report. When this happens, go ahead and follow the recommendation of your real estate agent. The one bit of value that a legitimate credit repair organization can offer is cleansing your credit perhaps a little faster than you can, because a legitimate organization will have cultivated some contacts at the credit bureaus and also at some major banks. However, if you regularly review your credit report (you should, at least once or twice a year for each of the three major bureaus) and you find negative information you want to remove or clarify, if you are not in a big hurry then do it yourself. I will tell you how in this article.
How Bad Credit Repair Organizations Try to Repair Your Credit—and End Up Hurting You
Bad credit repair organizations have a couple of phony strategies which end up hurting you, more often than not. One is to take a “shotgun” approach, and dispute each and every item on your credit report, whether or not it’s a valid debt. This approach attempts to take advantage of the law which requires credit bureaus (Experian, Equifax and TransUnion) to process disputes within 30 days of receipt. By overwhelming the dispute agents at the bureaus, the bad organizations attempt to push the disputes past the 30-day limit, and then the bad credit remarks will be removed, along with the entire tradeline.
The problem with this approach is that the bureaus have the legal ability to mark you, or the credit repair organization you hire, as a “frivolous disputant,” and thereafter will ignore all of your disputes, even if valid. Further, if this strategy works, it is often for the short term only: once the furnisher or the credit bureau realizes that the bad mark has fallen off your credit report because of the 30-day limit, the bad mark will often be re-reported, if it was valid. So, it may come off of your credit report for 3 months or so, then come right back on again.
Another thing bad credit repair organizations do is to mark all of your negative tradelines as “not mine.” This is more or less the easiest dispute to make. It can cause some problems for some furnishers of information, as it is a very broad and non-specific dispute, but again, even if it works in the short term to remove negative information, that probably won’t last. Further, disputing a tradeline as “not mine” when in fact it is subjects you to being labeled a frivolous disputant.
How to Handle Your Own Credit Report Disputes
It’s pretty easy and you do not need the assistance of a credit repair organization.
First, remember to use old-fashioned letters. Disputing over the phone leaves you with no record of the dispute or how you expressed it. Similarly, disputing online gives the credit bureau all of the information but leaves you with none. You absolutely want to keep a record of your dispute, and it’s best to use “snail-mail” and certified mail to send it to the bureaus, so you will have a record of the dispute.
The addresses for sending disputes to the bureaus are given on their websites, and can also be found at www.ftc.gov. This is the Federal Trade Commission website. You can also google “addresses for sending credit report disputes.” I just did this and obtained the following addresses:
Here are the mailing addresses for each credit bureau:
- Equifax. P.O. Box 7404256. Atlanta, GA 30374-0256.
- Experian. Dispute Department. P.O. Box 9701. Allen, TX 75013.
- TransUnion. Consumer Solutions. P.O. Box 2000. Chester, PA 19022-2000.
You must dispute with the credit bureaus to invoke the federal Fair Credit Reporting Act, which is the law you would most likely use to sue credit bureaus or banks for false credit reporting. So, send your disputes to the bureaus who are reporting any false, inaccurate or unverifiable information, and cc the bank, creditor or debt collector that is furnishing the bureaus with the false information. The bureaus have 30 days to investigate the dispute, and can respond by removing the tradeline, modifying it or letting it continue to report.
What I have just described is what most or all of the credit repair organizations do for you. You can do it at no cost (other than postage) and it doesn’t take that much time.
If indeed you have false, inaccurate or unverifiable information on your credit report and you cannot get it removed with the disputing process, then you need to see an attorney who specializes in litigation under the Fair Credit Reporting Act. My firm is such a firm, and we would love to review your possible case free of charge.
Copyright © 2019 by Robert F. Brennan, Esq. All right reserved.