Money Management: Be Careful of Credit Repair Services - Know Your Rights

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Good credit management  or a good credit score is an essential skill these days.  Your credit history is the sum collection of all financial information relating to your life - the credit limit, how long you've had it, the balance and the payment history.  This is the information by which current and future  creditors  assess your ability to pay and whether they will or will not extend credit.  These days outside of more credit, your credit affects the most primary aspects of your life such as rental dwellings,  getting a mortgage, insurance and employment.  After the financial crisis hit, what used to be a good credit score isn't good anymore, and so people with a 720 FICO score suddenly found themselves with higher rates or getting rejected.

Unfortunately, with this situation being a reality for most, you'll find more and more predators posing as legitimate business people and taking advantage of those who are already under tight financial strains; and seeking credit repair solutions.  But I am here to tell you, if you do not already know, the federal government has addressed and provided protection for you with the Credit Repair Organizations Act.  There are a number of these credit representatives out there telling people they can guarantee, wipe their credit  clean and increase their credit score.

But before you seek to have a "person" or "credit repair organization" help in repairing your credit, be sure to read the following...

The "Consumer Credit File Rights Under State and Federal Law" states that

before you sign a contract, this person should have given you a written statement of your rights entitled "Consumer Credit File Rights Under State and Federal Laws.

which would further state that

(1) you can contact the credit bureau directly and dispute any inaccurate information on your credit report; (2) neither you, nor any credit repair organization, has the right to remove accurate, current, and verifiable information from your credit report; (3) credit bureaus must remove negative information from your credit report, even if it is accurate, if it is over 7 years - bankruptcy information can be removed after 10 years.

The law further states that...

a credit repair organization cannot charge you for services before performing such services, and that you cannot be forced to give up your rights  (regardless of a contract) to perform such services - such attempts would be a clear violation of the law.

If you ever find yourself or know someone in this situation, your can bring this to the attention of your State's General Attorney and the Federal Trade Commission.

Credit repair services - know your rights!

The great news is that, over time, you can raise your credit score by learning how credit score works and getting a disciplined handle on your finances. See below for some facts to remember while  working your way through your financial crisis.

Facts to remember

  • You can't fix your credit and your score can't increase if you are unable to pay your bills.
  • Credit repair does not happen over night and takes time.
  • Real credit repair can only be achieved when you have overcome your financial crisis, and you are back on track with maintaining your expenses.
  • To generate a credit score you have to use credit.

 

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Disclaimer: Nothing in this article should be construed as legal advice and is offered as information only. You are advised to consult an attorney with knowledge of the specific state laws within your local jurisdictions.