What Exactly is Credit Repair and Restoration?
Tremendous amounts of misinformation circulate through the internet and airwaves about credit repair. Most people don’t even know exactly what it is – they confuse it with credit counseling, debt settlement, or perhaps dismiss it as a scam. Others trumpet around the saying, ‘don’t be fooled, fix your credit yourself! Anyone certainly can fix there own credit, and if they have the knowledge and ability this is the best route to go. In fact, Credit Development Solutions will even provide you with free materials to get you started!
Credit Repair is simply working through every available legal means to fix your overall credit profile. Your credit score is a byproduct of this profile, so as you begin to fix it your score almost always begins to rise. The process can involve many things – paying down debt and maintaining good payment history, establishing new lines of credit, etc. But the main part consists of the aggressive enforcement of your civil rights given to you by law. There are strict regulations about what can be on your credit report and how it can appear there. Credit Development Solutions works hard to make sure your rights are being upheld!
But just because someone can fix their own credit doesn’t mean it is advisable to do so. You can also represent yourself in a court of law, replace the engine in your car, or sell your own house; but again, that doesn’t mean these are wise courses of action for most people. But why not fix your own credit? Well, simply put, the credit system is highly abusive to the everyday consumer and the odds are stacked against the little guy from the beginning. Navigating the relevant laws and utilizing effective tactics can be difficult and time consuming. Legitimate credit repair, just like other professions, exists to provide experience and expertise to help clients do what they don’t otherwise have the time, energy or training to do.
Anyone advising against credit repair usually either doesn’t know the law or has a hidden agenda. Such misinformation harms untold numbers of consumers because legitimate credit repair has helped thousands and thousands of people improve their credit and enhance their lives. It is no surprise creditors, credit bureaus and government agencies will try to convince you credit repair is ethically or legally wrong and all negative information must remain on your credit report for 7 years (10 years for bankruptcies) – this is somewhat true but only half the story. Why the misinformation campaign? Simply put, it all boils down to money….no surprise there! Bad credit makes more money for credit bureaus, banks, and many creditors. These in turn employ powerful lobbyists who strongly influence government stances on credit and credit repair. It is a vicious cycle that ends up costing a lot of people a lot of pain and money.
But perhaps even worse are the ridiculous claims put forth by some credit repair companies. You probably have heard ads promising to have everything negative removed from your credit report, or that claim to have insiders working for them at the credit bureaus. Let’s be honest, this isn’t credit repair, this is simply fraud! But we can’t define an industry by those headline-grabbers on the fringe. Open, honest and caring credit repair companies operate legally and with your best interests in mind.
But What Does the Law Say?
Let’s talk a little about the laws and try to dispel some of the myths and propaganda giving credit repair a black eye:
First of all, credit repair certainly is legal! The Credit Repair Organizations Act of 1996 regulates how legal credit repair companies must operate. State laws also apply, for example, in Texas chapter 393 of the Finance Code governs credit services organizations.
Second, several laws exist to protect the consumer against credit bureau, creditor and debt collector abuse (for example, the FCRA, FDCPA, FCBA, FACTA, etc.). These laws are fundamental to credit repair as they regulate these entities. Remember, credit bureaus are not government agencies! They are private companies who compile billions of pieces of data on consumers every month (without their consent) and sell the information. They are in it to make money, never forget that! It is no accident that the ‘F’ in all of the laws listed above stands for ‘Fair’ – the system needs regulation and you need to know your rights!
Third, every item that is reported on any credit report has three requirements by law. They must be:
Within the allowable time frame
The burden of proof is on the credit bureaus and data furnishers here, they can’t report anything not complying with these standards. (See section 611 of the FCRA). So if the law says this, do the credit bureaus, creditors and collection agencies comply and keep accurate records? NO! Consider the following: studies have shown that up to 79% of credit reports contain errors, and almost 30% of these errors are serious enough to keep someone from getting credit while the other errors skyrocket interest rates for unsuspecting consumers. Think about this – there are 250,000,000 people in America with credit files – almost 200,000,000 people have errors in their files and around 60,000,000 would be denied credit because of these errors.
We want you to know you can protect yourself against such abuse. We want you to know the truth about the credit system and show you how legitimate credit repair works. Credit Development Solutions has built its business around helping people dispute, contest and eliminate the inaccurate, unverifiable and out of date information plaguing credit reports nationwide. And remember, since we take a comprehensive approach to fixing your credit we don’t just work on disputing these errors, we also help you with credit lines, utilization rates and debt ratios. This broad-based approach allows us to address over 75% of the factors that affect your credit score.
You can’t eliminate accurate, verifiable and timely items off of your credit report unless you negotiate directly with the creditor and work out an arrangement. You can’t indiscriminately contest every negative item on your credit report either. And you definitely can’t lie and say ‘it’s not mine’ when you know it is! But, you will see there is no need to be unethical or underhanded when trying to improve your credit score. Everyone can begin establishing and strengtheing their credit by maintaining a disciplined payment history and paying the obligations they legitimately owe (although the timing and nature of these payments is important for your credit score). These simple steps can be done while also addressing the problems on your credit report. These strategies, along with other courses of action we at Credit Development Solutions advise, can put you firmly on the path to proper credit management and financial wellbeing.
Contact us if you would like to know more!