Credit Repair Facts

Written disclosures and a written contract are required for credit repair services.

Credit repair services must give consumers written details and full disclosures based on the Federal Credit Repair Organizations Act of 1997 This does not apply to nonprofit organizations, banks and credit unions, or the creditors themselves. These disclosures must be presented before any agreement is made. This applies to any company operating in any way in or out of state by telephone or any other means. There must be a written contract signed by the buyer and there is a three day right to cancel policy. No payment can be requested until the services that were promised have been fulfilled.

Don't pay money upfront for credit repair services.

In addition it's against the law for a company to require payment before the promised credit repair has happened. The Federal Telemarketing Sales Rule says that if the services are offered through an interstate phone call. The company cannot ask for payment until it has provided you with proof of the promised results. They must give you a copy of your credit report that has been issued by a credit bureau more than six months after the corrections were made before they can ask for money.

No one can remove negative information if it is accurate, even for a fee.

No matter what they tell you they cannot remove correct but negative information from your credit report. Accurate negative information remains a part of your record for at least 7 years from the time it is reported (10 years for bankruptcy). Only incorrect information can be erased from your credit report. Any company that advertises, or promises to remove negative information is lying, do not do business with them.

You can include an explanation in your report concerning negative information.

If you have negative information on your report and it is accurate it cannot be removed, however, you can place an explanation on the report which will clarify and explain the situation. If you got ill and fell behind on payments, or if you were disputing a purchase leave a short statement in your file. This can help when applying for credit.

You can't create a second credit file.

If anyone tells you that you can repair your credit by creating a new or second credit file don’t listen. This is seriously illegal and can get you into a lot of trouble. It can also be called file segregation.