If you have ever been denied credit, it may be beneficial to order a copy of your credit report to dispute erroneous or outdated information. Credit repair clinics can help those who find task to appear daunting.
Significance
Credit repair clinics dispute undesireable items on a consumer's credit report with credit reporting agencies such as Equifax, Experian and TransUnion.
Function
For a fee, credit repair clinics will dispute a consumer's credit file by ordering his credit report, looking for outdated information and incorrect information, such as accounts with incorrect balances, and writing dispute letters to the credit bureaus to remove that information.
Benefits
The main benefit of using credit repair clinics is that they perform the administrative aspects of disputing your credit file for you, thus saving you time and energy. In addition, credit repair clinics are typically familiar with laws, such as the Fair Credit Reporting Act and the Fair Debt Collections Practices Act and know how to use these laws to ensure that outdated or erroneous information is removed from your credit file.
Misconceptions
Many consumers believe that credit repair clinics are capable of removing negative or accurate information from credit reports. According to the Federal Trade Commission (FTC), however, a credit repair clinic cannot legally do this. In addition, the FTC advises that with the proper knowledge, you can dispute your own credit for free
Warning
Be aware of credit repair clinics that ask for up-front payment before performing credit repairing services. In addition, steer clear of clinics that suggest that they can get you a new credit file using an Employer Identification Number (EIN), as this illegal.
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