Indiana's credit repair resource
The Fair Credit Reporting Act (FCRA)
The FCRA as it applies to Creditors and Credit Bureaus
Since the passing of the FCRA, creditors have worked at making credit repair complex and challenging. As legally written, the credit disputation process is simple; however, creditor and collectors strive to make the procedure very difficult. Creditors are able to charge higher interest rates to those with a poor credit score, so it benefits their bottom line to keep the individual's credit subprime and lower.
The three major credit reporting agencies (Equifax, Experian and Transunion) are not really helpful to the consumer when it comes to verifying credit reports. All three credit bureaus are large multi-million dollar corporations that will do whatever it takes to turn a profit. Although they are regulated by government agencies, they have no direct connection with the US government.
The method by which these credit bureaus make money is by selling consumer credit to lenders, insurance agencies, employers and landlords. What most people do not know is that they also sell your personal information to telemarketers and mailing list companies. The more often a consumer applies for credit, the more money the credit bureaus make. A person with poor credit must apply 6-7 more times than the person with prime credit. These credit agencies will admit that there are errors in the credit report but they also state that it is not their responsibility to fix them. Why would they when it hurts their bottom line?
Credit Repair Basic Steps
- Obtain credit reports.
- Highlight items to dispute.
- Dispute items with credit bureaus.
- Repeat cycle as needed.
The concepts themselves are not that complicated; however, the legality and bureaucracy behind them are. Additionally, in today's environment a certain degree of technology is helpful in expediting and making the process more efficient. The good credit repair companies have state of the art technology and the understating of the consumer laws to quickly and effectively dispute discrepant items on the consumer's credit report. The best credit repair companies, and the only ones that we recommend, will not only help with step 3 (disputing), but will also guide the consumer through each step of the process. This includes helping consumers obtain free copies of their credit report.
In addition to the FCRA, the Federal Trade Commission (FTC) has enacted hundreds of policies that credit reporting companies, collection agencies and credit bureaus must comply with in order for any reported item to remain on your credit report. Our recommended credit repair companies and law firms utilize skilled credit analysts to review your reports and determine the most appropriate strategy for restoring your credit score. This includes determining which items can be challenged, evaluating the length of time necessary and potentially recommend other financial strategies. The credit specialists then formally challenge each item with all three major credit bureaus.
Legally, the credit bureaus have 30 days to respond and at that time they will provide a summary displaying the results for each challenge made. Our recommended credit repair providers have an overall success rate of 85% to 95% when it comes to removing unverifiable derogatory items. Additional good news is that the items that tend to be removed first are the ones that are the most damaging to the credit report. The credit repair specialists will partially depend on you to help verify the items on your credit report that need to be disputed. The list of items that our recommended providers have removed include, but is not limited to, the following items...
- Bankruptcies
- Tax Liens
- Judgments
- Charge Offs
- Repossessions
- Student Loans
- Foreclosures
- Civil Liens
- Medical Bills
- Slow Pays
- Inquiries
- Old Information
- Late Payments
Depending on the credit repair service that is right for you, you can see results in as little as 45-90 days. This means that you will not have to wait 2-3 years with poor credit repair companies or 7-10 if you do nothing in order to qualify for a lower interest rate on a loan. That being said, our recommended credit repair providers are not just there to go through this process with you once. They are vested in your total credit situation and provide ongoing service in order to ensure that no items are missed and you truly have a converted credit profile. Would you rather be enrolled in a program that will stretch your repair process over a long period of time or do you need to have it done quickly? This will depend on your individual situation. Based on your circumstances we can help provide additional information that will allow you to make an intelligent decision about which credit repair solution is right for you.
