Using Credit Restoration Services for the Least Cost

A type of business that has grown recently is credit restoration services. These services are advertising on TV, radio, in newspapers, and even with huge telemarketing campaigns. Some are making promises they cannot keep such as clearing a bankruptcy from your credit report.

How to Recognize a Scam

There are many Red Flags to look for when considering using any of these services.

  • You are asked to pay a fee for services in advance. The Credit Repair Organizations Act states you do not have to pay anything until they have completed their services.
  • They do not tell you that you can do you can do most of these repairs yourself for free.
  • They tell you that you will cause more damage if you contact the major credit reporting agencies yourself.
  • They tell you they can remove bad credit information even if the information is accurate.
  • They tell you to apply for an Employer Identification Number instead of using your Social Security number

Do It Yourself

The Federal Trade Commission says you can repair your credit discrepancies yourself. Attorneys in the Consumer Protection Agency say they have never seen a legitimate company making claims to the contrary.  

Restoring Bad Credit Reports

If your credit report shows an accurate problem, there is a seven year Statute of Limitation on how long this information can be shown on your report. The seven year time limit starts at on the date the first late payment is sent. If there is an item on your credit report past this seven year limitation, you can request the reporting agency have it removed.

If there is a discrepancy on your credit report that you feel is inaccurate, you have the right to contact the reporting agency. It is your obligation to prove that they are in error. You need to inform the reporting agency, in writing, what item is in dispute. Include copies of any documents that support your claim. Besides including your name, address, Social Security number and substantiating documentation it is advisable to send a copy of the report. Circle the item you want to dispute.

Send your claim by certified mail with a return receipt requested. This receipt will prove it was delivered and who signed for the delivery. Remember to keep copies of everything you are sending.

Credit Restoration

Credit restoration is not an easy task, once you have received a legitimate negative item on your credit report or have a bankruptcy on your record; you need to work on developing a better credit history. Start slow and build up your rating. There are ways to rebuild your credit and restore yourself to a better standing.

Keep a credit card. If you’re declaring bankruptcy, keep a credit card with a zero balance. If you have no debit with them you usually do not need to report it in your bankruptcy. If you use this card, pay the balance in full and on time.

  • Apply for time payments at a local merchant. They may be willing to give small amounts of credit for in store purchases
  • Apply for a debit card. This works like a credit card except you deposit money into the cards money account.
  • Build a history of a checking account with a clean record

With patience and diligence, a clear record can be obtained. It won’t happen overnight, but can be achieved.

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