Legal Credit Repair vs. Illegal Credit Repair
When it comes to credit repair, the law is on your side. The laws created by the FTC on credit repair are to protect you from the credit reporting agencies, collection agencies and credit repair companies. Legal credit repair methods are not only smarter (because you won’t end up in jail), but they are also less expensive.
Most unlawful credit repair companies have been taken down by the FTC; however there are still some in operation. If you are would like to repair your credit, it’s important that you don’t get lured in by illegal tactics and fraudulent companies. If you follow illegal advice and commit fraud, you may be subject to prosecution. Below is a list of illegal credit repair techniques to look out for:
Illegal Credit Repair Tactics
- Changing your social security number or starting a “new” credit file. Some companies will offer to teach you how to start a new credit file by applying for an Employer Identification Number to use instead of your Social Security number. Avoid and report such companies.
- Companies that ask you to pay for credit repair services before they provide any services.
- Companies that don’t tell you your legal rights and what you can do by yourself for free.
- Remember, it is also illegal to try to obtain credit by lying or making false statements on an application.
Now that you know what to avoid, let’s look at some of the things you can do to repair your credit.
Legal Credit Repair Tactics
- Dispute erroneous information on your credit report. Not only is it legal, it’s your federal right. The Fair Credit Reporting Act gives you the right to dispute items on your credit reports directly with the credit bureaus. The burden of proof is on the credit bureaus. If they can’t verify that information is correct, then it must be deleted.
- Debt validation is a tactic that’s used when dealing with collection accounts. The FDCPA gives you the right to demand that collection agencies validate any debts that they are trying to collect on.
- Negotiating directly with creditors is a tactic that is sometimes used to ask the creditors politely to remove the negative items from your credit report.
Interested in having professionals repair your credit? Check out the top legal credit repair services.