12 Oct 10 Myths About Your Credit Report – Part 3: Credit Repair Is Illegal
The Fair Credit Reporting Act provides consumers with a mechanism to dispute and seek correction of incorrect and inaccurate credit information. There is no charge for disputing mistakes on your credit report, but doing so properly can take anywhere from a number of hours to a number of months. It is improper, however, to dispute information you know is correct. That’s why it’s important to review your credit reports carefully and ensure that you are disputing only incorrect information.
There are many credit repair services that offer to do the heavy lifting for a fee. But regardless of what they promise, they don’t have any secret remedies for erasing bad credit. Neither you nor the credit repair service has the right to remove accurate and current information from your credit report.
The bottom line? You can do it yourself for free, or hire someone to do it for a fee.
According to the FTC, there are very few of these services that are legitimate. In fact, “credit protection and credit repair” scams are one of the top consumer complaints reported to the FTC. The FTC estimates the loss to consumers is easily in the millions.
So how can you tell the companies who are on the right side of the law? Credit repair services must follow specific guidelines from the Credit Repair Organizations Act, which are intended to protect consumers. You should receive an explanation of these rights before signing a written contract. Read them.
You should receive a contract with all of the following information:
The credit repair company cannot perform any services for you until you’ve signed a written contract and completed a three-day waiting period. You may cancel the contract without paying any fees during this period.
For more information, check out the FTC’s web site about the Credit Repair Organizations Act.

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