Repairing Your Credit

Wednesday, November 3, 2010

You have either taken that first important step toward securing financial health or someone has brought to your attention that you need to. Perhaps you have obtained a copy of your credit report on your own initiative or have been denied a loan. Either way at this point you know that you your credit report is in need of repair. You can do this yourself for no fees other than postage. There are companies that can help you to repair your credit and sadly there are companies that can hurt you in the process.

There are advertisements all over the radio, television and internet claiming that a company out there can repair your credit for you. Be careful of what they want to do for you. Most of these companies are making claims that are not true. No one can legally change or remove information from your credit report unless it is false. If you have been denied an application for credit, insurance or employment you have 60 days to ask for your free report from the company that denied you.

If you find false information on your credit report you may dispute it free of charge. You need to report to the company that denied you, in writing, the information you believe to be incorrect. This report should include copies of any documentation you may have that support your case, your name, your address, identification of each item you are disputing (stating the facts and reasons you are disputing them), and ask for the items to be removed or corrected. Your report should be sent by certified mail for tracking purposes.

The company must begin an investigation within 30 days of receiving your request. They will forward your dispute to the organization which provided them with the information on your report being disputed. They are then required to investigate and report back to the company their results. If it is, in fact, inaccurate the company must notify the three nation-wide credit reporting bureaus (Equifax, Experian or TransUnion) for them to correct your credit report. When the investigation is complete the company must provide you with a written copy of the results of the investigation. If a change is made to your credit report you will also receive a free copy of your new report. You may also request that the newly corrected copies of your report be sent to anyone who received your report in the past six months (or two years if it was sent for employment purposes).

Only time can mend a spot on your report that is true. Most negative information that is accurate can continue to be reported for seven years. Bankruptcy information can be reported for ten years. Criminal convictions can be reported forever. Any information resulting from an application for more than $150,000 worth of credit or life insurance remains on your record forever as well.

If you do hire a company to repair your credit they may not charge you until they have completed the services promised in your contract. Your contract must specify the payment terms and total cost for services, details of the services they will perform, a timeframe for these services and the company’s name and business address. They also may not perform services until three days after you have signed the contract. You have these three days to cancel the contract without paying any fees to the company.

Once you have taken care of your credit report try to make it a habit to check up on it. You are entitled to a free copy every 12 months as long as you request it. Once you have repaired your credit report they to commit to improving it. The information in your credit report is what calculates your credit score. Try to increase that score!