Steps towards Credit Repair

The following are the steps to be followed to make a correction in your credit report:

How to Dispute Credit Report Errors - Step I
Inform the consumer reporting company by means of written communication, what information you think is inaccurate and along with this, make sure you include copies and not originals of documents that support your position. Apart from providing your complete name and address, your letter also should clearly identify each item in the credit report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected appropriately. You may also want to consider enclosing a copy of your report with the items in question circled or highlighted for ease of processing. Your letter can be based on the template provided a little later in this article too. Ensure you send your letter by certified mail with the 'return receipt requested' option so you can document what the consumer reporting company received and maintain copies of your dispute letter and enclosures for future reference.

Consumer reporting companies are expected to subsequently investigate the items in question, usually within 30 days unless they consider your dispute trivial or baseless. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information for verification. Once the information provider receives notice of a dispute from the consumer reporting company, it must investigate and review the relevant information, and then report the results back to the consumer reporting company. In case the information provider finds the disputed information is inaccurate, it must notify all three nationwide consumer reporting companies so that they can correct the relevant information in your file.

Once the investigation is complete, the consumer reporting company is obliged to give you the results by means of a written communication and also provide you with a free copy of your report if the dispute does eventually result in a change in your credit score. In case an item is changed or deleted, the consumer reporting company will not be able to put the disputed piece of information back in your file unless the information provider verifies that it is accurate and complete. The consumer reporting company also must mandatorily send you a written notice that includes the name, address, and phone number of the information provider.

In the event that you do request for notices of any correction to anyone who received your report in the past six months, the consumer reporting company is obliged to honor this request. You can subsequently have a corrected copy of your report sent to anyone who received a copy during the past two years for employment purposes, for instance.

If an investigation for some reason does not succeed in resolving your dispute with the consumer reporting company, you can request for a statement of the dispute to be included in your file and in all future reports. You also can request the consumer reporting company to provide your statement and altered details to anyone who received a copy of your report in the recent past. You can however, expect to pay a fee for this service.

How to Dispute Credit Report Errors - Step II
Inform the creditor or any other information provider by means of a written communication, that you dispute an item. Ensure that you include copies and not originals of documents that support your position; it also helps when providers specify an address for disputes. In case the provider does report the item to a consumer reporting company, it must also include a notice of your dispute. And if your claim turns out to be correct, that is, if the disputed piece of information on your credit report is found to be inaccurate, the information provider may choose not to report it again.

Building a Better Credit Report

When negative information in your report is correct, the only way to ensure its removal is the passage of time. A consumer reporting company can report most accurate negative information for up to a period of seven years and bankruptcy information for a period of up to 10 years. Information about an unpaid judgment against you can be reported for up to seven years or until the statute of limitations runs out, whichever may be longer. There however is no time limit on reporting information about criminal convictions or information that has been reported in response to your application for a job that pays more than $75,000 a year or else information that is reported because you have applied for more than $150,000 worth of credit or life insurance. There is a standard method for calculating the seven-year reporting period and normally, the period runs from the date that the event took place.

Credit Repair Organizations Act

As dictated by the law, credit repair organizations are liable to give you a copy of the 'Consumer Credit File Rights under State and Federal Law' before you sign a contract of agreement with them. They also must give you a written contract that clearly spells out your rights and obligations. It is important to read these documents carefully before you sign any agreement. The law contains specific protections for you knowing that you as a consumer are always vulnerable to cunning tactics that credit repair organizations may use as bait. For example, a credit repair company cannot do the following:

o Make false claims about the services they offer

o Charge you until they have completed the promised services to your satisfaction

o Perform any services until they have your consent and signature on a written contract and have completed a three-day waiting period. During this time, you are free to cancel the contract without paying any fees.

In addition, your contract must specify the following:

o Payment terms for services, including their total cost and payment due date if any

o Detailed description of the services to be performed by the credit repair organization

o Time frame within which desired results would be achieved successfully

o Guarantees if any that are being offered

o Company's registered name and business address along with other contact details

If you have been a victim of fraudulent claims by a credit repair organizations, do not despair for help is just round the corner!

Many states have enforced laws regulating credit repair companies and State law enforcement officials may be helpful if you have lost money while being tricked into credit repair scams.

In case you have had a problem with a credit repair company, you need not be embarrassed to report it. While your fear that contacting the government will only make your problems worse may not be baseless, you must remember that laws are in place to protect you. You must waste no time in contacting your local consumer affairs office or else your state Attorney General also known as AGs who usually have toll-free consumer hotlines using which it is relatively easy to get in touch with them to report any grievances. Alternatively, you can check the Blue Pages of your telephone directory for the local phone number or check the website www.naag.org for a list of state Attorneys Generals you could get in touch with for help.