The Federal Trade Commission supports fair trade and financial transactions in the U.S. The commission also regulates and enforces laws regarding consumer credit reporting, working to protect consumers from inequitable credit reporting and deceptive credit repair professionals, as well as provides the tools you need to understand and improve your credit rating.
Third-Party Credit Repair
Many companies advertise services that guarantee to help you legally rebuild your credit by erasing information on your credit history regarding bankruptcies, late payments and other negative items. Unfortunately, many consumers fall victim to these claims, despite the Federal Trade Commission's warning that these claims should raise a red flag. The Credit Repair Organizations Act seeks to thwart the attempts of many third-party credit repair companies to scam you by preventing companies from accepting a payment from you until they perform the services they promise in their contract with you. Additionally, these companies cannot begin the credit repair process until three days after you sign the contract, allowing you ample time to reconsider your contract and change your mind.
Disputes
The Fair Credit Reporting Act provides you the right to dispute information on your credit report that you believe is inaccurate or incomplete. You can dispute information on your report free of charge by writing a letter of dispute to each of the three credit bureaus, as well as your creditor. Include in your letter information and documents that support your claim. Within 30 days, each credit bureau will make a decision whether or not to remove the disputed information from your credit report depending on whether or not the claim is substantiated. If you receive a claim denial you believe to be uncorroborated, you may file a complaint with the Federal Trade Commission by calling toll-free 1-877-382-4357.
Considerations
If you dispute information on your credit report that you know to be true, your claim may not receive investigation, and the credit agencies may instead toss out your dispute as frivolous. By law, no creditor, credit agency, third-party credit repair company or other entity may legally remove information from a credit report known to be true. Instead, allow time for the negative items on your credit report to disappear, usually occurring after seven years, though bankruptcies may remain on your report for up to 10 years.
Rights
Under the Fair Credit Reporting Act, you have the right to a free copy of your credit report from each of the three major credit reporting agencies each year. You may acquire a copy of your credit report more than once each year, but you will likely pay a fee for each additional report you request. Be aware, however, that your credit report does not include information about your FICO credit score, which you must purchase separately. To acquire your free copy of your three credit reports, call 1-877-322-8228 or mail a completed copy of the Annual Credit Report Request Form available for download from the FTC's website to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can also visit Annualcreditreport.com to order your copies.
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