Credit repair companies offer to “fix your credit” by removing negative elements from your credit report. They offer to file negative item disputes on your behalf with credit bureaus and have them removed. The Fair Credit Reporting Act (FCRA) entitles you to dispute inaccurate items in your credit reports. You can do this by mail or online at all three credit reporting company websites.
Keep in mind that there are many credit repair companies that claim they can remove negative information from your credit reports for a fee. However, neither you nor a third party can remove negative but accurate information. They contain information about your credit history, including some bill paying activities and the status of your credit accounts. Under federal law, you have the right to get a free credit report from the three major credit bureaus (Equifax, Experian, and TransUnion) once a year.
A number of nonprofit credit counseling organizations, such as the National Foundation for Credit Counseling (NFCC), can help dispute inaccurate information on your record. You may be entitled to additional free credit reports in certain circumstances, such as after placing a fraud alert, becoming unemployed or receiving public assistance, or having been denied credit or insurance in the past 60 days. The Fair Credit Reporting Act (FCRA) gives you the right to dispute inaccurate negative items on your credit report, but you have no right to delete the correct items. In fact, you can lower your credit rating by increasing the debt-to-credit ratio, also known as the percentage of credit utilization.
This ratio represents the amount of credit you are currently using divided by the total amount of credit you have available. The FCRA requires credit reporting agencies to investigate anything you dispute in your credit report. However, a paid collection will only help your credit score if the collector agrees to remove the item from your credit report. To do this, get your free credit report from the three major credit bureaus (Experian, Equifax and TransUnion).
Either way, it's up to you to work to get rid of unfavorable credit report entries from your credit report. However, if you decide to hire a credit repair agency, keep in mind that there are consumer protection laws that regulate how they operate and what they can do. Under the Fair Credit Reporting Act (FCRA), credit bureaus and lenders must ensure that the information they report is accurate and truthful. Credit repair companies like Lexington Law charge monthly subscription fees plus a first job down payment.
