Credit Repair

If you are in the no man’s land of having negative items on your credit report, one of the best explanations of the ethics of removing negative entries is the following article written by an attorney: “Credit Repair” has not been kind to the American consumer. In fact, the phrase is synonymous with fraud. This is the stigma we face as we offer a client an alternative to credit prison.” Because the nasty reputation of credit repair sometimes washes over into our business, we are called upon to defend the ethics of our service.

Removing record of a negative credit account, which did actually exist, is undoubtedly ethically sound. We belong to a fundamentally capitalistic civilization and the credit bureaus capitalize on consumer information.

Unlike our legal system, credit reporting firms take no oath to truth, equity and the common good. No American has the moral obligation to support any business venture or corporation, much less a corporation which may well destroy their financial life. The information reported by the credit bureaus is ethically “up for grabs.”

The credit bureaus would maintain every piece of credit information forever if it weren’t for federal law which has directed them to remove most items after seven years. Under the law, the credit bureaus themselves practice credit repair, basically at the seven year mark. If it is right to remove accurate credit entries after seven years, why would it be wrong to do so in less time?

In relationship to the consumer, the credit bureaus do not concern themselves with the impact, or accuracy, of the information they give out. This information often misrepresents the credit worthiness of the consumer. By tagging good citizens as “deadbeats” the bureaus damage the creditors, the economy and, most importantly, the individual. Numerous policies and techniques employed by the credit bureaus appear quite harmful to the American consumer. These policies and techniques are the basis and justification of our opposition to the present credit reporting system.

Seven years (10 years for bankruptcy and some court accounts) credit bondage penalizes the debtor unjustly. At no point have the credit bureaus ever conducted a study determining seven years to be the point of deadbeat rejuvenation.

The seven year mark is entirely arbitrarily. In fact, Dr. Bonnie Gution, adviser to President Bush on consumer affairs, remarked, “…it is our understanding that computer models that predict credit worthiness find most information that is more than two years old nonessential.”

Credit Repair

Based on experience with clientele, seven years is truly too long. Within a year or two, most consumers completely recover from an economic crisis. For the remaining five or six years, they are handicapped; forced to rent homes, pay outrageous interest on high risk auto loans, forgo the convenience of credit cards and pay cash for every expenditure.

Removing the consumer from the credit loop causes the economy to suffer. Our clients come to us on the financial upswing. These are consumers fully recovered from crisis, re-engaged to financial responsibility and anxious to reenter the credit economy. For them, we offer a deserved release from the credit prison which they entered as their financial world fell apart.

The credit bureaus have not been able to maintain reasonable accuracy in their credit profiles. The bureaus claim an error ratio under 1 percent. In reality, studies conducted by neutral third parties have determined the credit report error ratio to be closer to 40 percent.

Unfortunately for the consumer, the credit bureaus choose to err on the side of negative information. As clients’ files have passed through our offices, we have noticed a high incidence of file mergers—the worst kind of file error. In a file merger, the credit of another person with a similar name is spread onto the file of the blameless bystander. Thankfully, using the current laws, the credit bureaus can be forced to correct these obvious errors. Credit repair is ethical.

Credit Repair Q & A

Credit Repair Q. I’ve read that any person can dispute a credit report item. Is that true?
A. Yes, but you have to be a little careful, and follow directions. History shows that most consumers give up, or don’t follow instructions properly. Some consumers even confirm negative items.

Credit Repair Q. What if I just pay off my past due and charge off accounts? Will it show “PAID” and no longer be negative?
A. Paying your debt is always a good idea as there are only 3 ways to get out of debt in the United States; Pay, Go Bankrupt or Die. But the paying of debt only shows that it’s paid. The problem is that it does not improve your credit history. Your credit history is what is dragging you down. You have to repair it.

Credit Repair Q. If I succeed in deleting negative items won’t they just come right back on?
A. This is a myth spread by the credit bureaus. The law says if an item is not re-reported within 30 days of being deleted it must remain off a report. However, if the item is sold to a collection agency, they could put the item back on in the future as a new creditor.

Credit Repair Q. Are there negative items such as bankruptcies, foreclosures, and liens that are impossible to remove?
A. It is possible to remove any kind of item you can think of. Every kind of negative listing can be repaired or removed from a credit report under the right circumstances. Some items are more difficult to repair and may take a while to fix. Part of this depends on the internal systems in use at each credit bureau.

Credit Repair Q. How long can a negative item remain on your report?
A. This issue has caused much confusion over the years. The law states that an item can remain for 7 years after last date of report before removal (10 years for bankruptcies). The law is in the Fair Credit Reporting Act 15 USC C section 605C.

Credit Repair Q. If I decide to declare bankruptcy can’t I restart my credit
A. Yes, but it may take 7 to 10 years for it to go off your credit history. If you are discharged from a bankruptcy, it’s possible to get it removed, but it usually takes a couple of years.

Credit Repair Q. Can I file a 100 word statement on my credit report?
A. Absolutely! The trouble is that most creditors pay no attention to these so called statements.

Credit Repair Q. If I build enough good credit will it offset my bad credit?
A. Not really. Any bad credit will probably prevent you from building good credit or any credit at all.

Credit Repair Q. Is it legal to repair your credit and have items removed?
A. The Fair Credit Reporting Act of 1971 as updated in 1997 gave consumers the right to have an item repaired or removed that was inaccurate, obsolete or unverifiable.

Credit Repair Q. Will consumer credit counseling repair my credit?
A. Most credit counseling services are affiliated with creditors. They usually work with you to pay off debt. They have nothing to do with the credit bureaus

Credit Repair Q. How hard is it to repair my own credit?
A. It’s really quite easy, and a lot cheaper than having someone else do it. As a general rule, you can do it faster and better than anyone could do it for you. If necessary, you can use tactics that no one else would do for you.

Credit Repair Q. What do I do if the credit bureaus fail to remove bonafide mistakes? Do I have any legal recourse?
A. Absolutely, we have found that genuine mistakes come off rather easily, but on occasion they may require legal action on your part.

Credit Repair Q. How long do the credit bureaus have to respond to a dispute?
A. The Fair Credit Reporting Act states that credit bureaus have a reasonable time period to respond. This is usually 30 to 40 calendar days

Credit Repair Q. How do the bureaus answer the disputes of the negative items?
A. This is a good question. Sometimes the credit bureaus don’t answer at all, and sometimes they send a stall letter. If they don’t answer in the time allowed, they must remove the negative entry. That is why you must always use Certified Mail in your correspondence with the credit bureaus. It’s the only way you can prove that you actually sent them dispute letters.

Credit Repair Q. What if one credit bureau repairs an item and another one does not?
A. Each credit bureau works independently. You must continue to work on your credit repair with the bureau that still reports the item.