Credit repair scams have almost become a regular feature. Everyday we find that credit repair companies claim that they will clear up your credit report and remove all negative items including bankruptcies and judgments for a fee, but they cannot deliver the desired results and end up taking huge fees. This is because nobody can remove negative information from your credit report if it is correct and so even after you pay hundreds of dollars to the credit repair companies, your credit report remains as it was before you have signed up for credit repair. It is not at all difficult to identify whether a credit repair agency is a scam or not. If you find that a company demands fees to repair your credit even before they provide any service then you should not go for that repair agency because as per the Credit Repair Organization Act, you are not required to pay any fees to the credit repair agency until and unless you get the result as promised. Moreover, the credit repair company must inform you of your rights under the Fair Credit Reporting Act and that they should also inform you can also repair your own credit if you want.
Federal Trade Commission also recommends you to repair your own credit. Doing this not only helps you save money, but also help you learn the basics of credit industry and the ways to maintain a good credit profile. Repairing your own credit is not at all a difficult task and you need to have patience to do so. You can follow the below mentioned steps if you want to repair your own credit:
- Pull out your credit report and find out the negative items there. Negative items such as judgment, charge off accounts and bankruptcies can never be removed from your credit report before the seven year period. However, there are certain other listings such as hard inquiry and outstanding delinquent accounts which can be removed if you pay them off.
- Hard inquiries can stay in your credit report only if it has been authorized by you and it can remain there for two years. However, if you have not authorized the hard inquiry, you should send a letter to the inquirer asking him either to verify your authorization or to remove it from your credit report. You may even threaten them that you may file a complaint with the State Banking Commission if they fail to remove it from your report. In most cases, the inquirer removes the hard inquiry from your report if they cannot verify your authorization.
- Now, if there is an outstanding debt listing in your credit report and the debt has been send to collections, you should always send a debt validation letter to the collection agency by certified mail to check whether you owe the debt or not. If the collection agency properly validates the debt, you should try to pay it off by coming to a repayment agreement. However, before coming to a repayment plan, you should always try to negotiate with the creditor for a pay for deletion agreement so that as soon as you pay off the debt, the negative items gets removed from your credit report and your credit score improves. However, even if the creditor does not agree to the pay for deletion agreement, you should try and pay off the debt to avoid judgment, which the creditor might bring at a later date. If the creditor does not agree to pay for deletion agreement and you pay off the debt in full, the debt will be listed in your report as “paid in full”. Although this “paid in full” listing is also negative, it is always better than an unpaid debt. If the collection agency cannot validate the debt, you should dispute the listing with the credit bureaus. The credit bureaus will get it verified and remove the item from your report.