The Fair Credit Reporting Act (FCRA) – was enacted in 1970 and was the first federal law to regulate the use of personal information by private businesses – those businesses being the CRAs.

The Act’s primary protection requires that CRAs follow “reasonable procedures” to protect the confidentiality, accuracy, and relevance of credit information. Generally, it states that you have the right to question any information on your credit reports that you feel may be questionable, such as accounts that you may feel are: inaccurate, misleading, untimely, ambiguous, incomplete, unverifiable, biased or vague.

Fair and Accurate Credit Transactions Act (FACTA) – was enacted in 2003 to amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to credit information. You can view a summary fact sheet on FACTA provisions at the Privacy Rights Clearing House Organization website here.

Fair Debt Collections Practices Act (FDCPA) – was enacted in 1977 to provide guidelines for collection agencies and attorneys which are seeking to collect legitimate debts, while providing protection and remedies for debtors.
Essentially, collection agencies fall under considerable scrutiny and legal requirements when it comes to the activity of debt collection. Employing your rights under this law is described comprehensively in the section of our Credit Library. Included in this section are the steps to follow that require CAs to validate a debt upon request, along with the steps and court case precedence to pursue legal action if necessary to force compliance.

Fair Credit Billing Act (FCBA) – enacted in 1974 to protect consumers from billing errors on “open end” credit accounts, such as credit cards, and revolving charge accounts – such as department store accounts. It does not cover installment contracts – loans or extensions of credit you repay on a fixed schedule.

The law defines a wide gamut of credit account problems as “billing errors.” These include a charge for something you didn’t buy, a charge with the wrong date or amount and a charge for goods or services that you didn’t receive or accept.

Once a mistake is identified you have 60 days to send a written dispute to the creditor notifying them of the mistake. They are required to acknowledge the dispute within 30 days and complete their investigation of the charge within 90 days. The law is really on the consumers’ side. With the proper steps, many of these billing errors are resolved in favor of the consumer. The FTC provides more information.

Like many things in life, credit restoration is something you can do yourself. It’s not rocket science. However, there is a RIGHT – WAY, and a WRONG – WAY to work at restoring your credit. For instance; many people think that if they send a letter along with copies of their collection receipts to the CRAs, that the item will be corrected to show a zero balance or even be removed from the report. If only it worked that way. The reality is that most of the time the CRA probably won’t do a darn thing because you didn’t invoke the law in your letter requiring them to do anything. Not only that, if they do update how the account is reporting, they aren’t going to remove it. In fact, good luck at trying to remove it later since you just provided them with the verification of the account and the information about it. Without realizing it, you just did the CRAs work for them and most likely eliminated the possibility of getting the item deleted from your credit report.

There are many key elements to effectively disputing information in a credit report and following up with the CRAs, creditors and collection agencies. It’s not hard, but there is a learning curve. You need to know how to read a credit report, have a good grasp of how to use the laws, develop a strategy of attack, and know effective follow up techniques.

In addition to learning the techniques and strategies, restoring your credit can be a tedious and time-consuming endeavor. It’s imperative to keep track of your previous dispute activities, time frames and remembering where you are at in your overall strategy. This requires organization and keeping good notes.

Again, like anything in life, the more you do something, the better you get.Probably the biggest challenge people have in doing their own credit restoration is that they just don’t have the time to devote to learning what to do, and then doing it conscientiously and persistently, all the while keeping organized. Quite frankly, they usually feel that they have better things to do with their time.

Our mission is “Helping People Manage & Grow Their Credit Worthiness”.

We believe that each person’s credit situation is unique and requires a custom plan of action. In addition to this, we also believe that customer communication, consultation and education are crucial to accomplishing our customers’ goals.

We have developed our business almost exclusively through referrals from banks and loan officers and have helped literally thousands of people improve their credit.

View the Credit Repair Organizations Act (CROA); signed into federal law to protect the public from unfair or deceptive advertising and business practices by credit repair organizations.

Errors are bound to appear on your credit report. In fact, according to a (Public Interest Research Group) 25% of credit reports contain errors that result in people being denied credit! If you don’t review your report once in a while, you won’t know what’s reported in it. And then, when you apply for credit or employment and find that you are denied because of your credit, well… what do you expect?

The bottom line is, you have the right to do something about it. Don’t expect the CRAs or creditors to make sure that your credit report is up-to-date and accurate. That’s your responsibility. If there’s errors, then you can and should dispute them.

In order to fix your credit score, you first need to know what information is bringing it down.

Request copies of your credit report from the three major credit bureaus: Experian, TransUnion and Equifax. Some creditors or lenders may not share your information with all three credit bureaus, so requesting all three reports helps you get a full picture of your credit history.

These major credit bureaus are legally required to provide a free credit report once per year under the Fair Credit Reporting Act (FCRA) and you can obtain them at AnnualCreditReport.com. The Federal Trade Commission (FTC) warns that you should be cautious of other “imposter” websites that misspell the AnnualCreditReport.com URL or include “free credit report” in their name in an effort to direct you to a scam website.

Once you’ve received your reports and read through each one, be on the lookout for errors or particularly damaging items.

Check the following when reviewing your credit reports:

Accounts that never closed after your request
Unfamiliar accounts that aren’t yours
Errors in your personal information
Accounts that are listed as maxed out
Payments that are past due
Accounts that are charged-off or sent to collections
For any delinquent payments and past-due accounts, you’ll need to get in direct contact with your creditors to resolve them through a payment plan to pay the debt or other resolutions. For incorrect information, you’ll need to submit disputes to the credit bureaus.

The process for disputing unfair, inaccurate or unsubstantiated items depends on the credit bureau. You can usually file your challenge online, over the phone or by mailing a letter. A successful dispute should result in the removal of negative items by the creditor or credit bureau and could help improve your credit score.

You should take the following steps to dispute a negative item:

Gather documentation that supports your claim.
Write a dispute letter. It should clearly identify the item(s) you are disputing, state your case and request to have the error removed or corrected.
Keep copies of your records. If you file online, take screenshots for your records. If you file via mail, be sure to keep your certified mail receipt.
Wait for the response.
Here is where to submit a dispute with the three credit reporting agencies:

TransUnion

TransUnion’s dispute page
Mail to: TransUnion LLC
Consumer Dispute Center, PO Box 2000
Chester, PA 19016

Experian:

Experian’s dispute page
Mail to: Experian
PO Box 4500
Allen, TX 75013

Equifax

Equifax’s dispute page
Mail to: Equifax
PO Box 740256
Atlanta, GA 30374-0256

Credit bureaus have 30–45 days to investigate your dispute. They forward all relevant data to the data furnisher (creditor, lender or financial institution), who is required to investigate and report back. If the creditor doesn’t respond or isn’t able to verify the accuracy of the data, the bureau may choose to remove the negative information.

The credit bureau must give you the results of the investigation in writing along with the name, address and phone number of the information provider. If the dispute results in a change, you’ll also receive a free credit report.

If the dispute isn’t resolved, you can request that a statement of the dispute be included in your future credit reports. If the item is changed or deleted, the credit bureau cannot add it back to your file unless the data furnisher verifies that it is accurate.

What Happens After You Submit A Credit Dispute Image
Whether or not your dispute is resolved, you can prevent future negative marks on your credit by improving your credit habits.

The most important thing you can do to maintain good credit is to pay all your bills on time. Your payment history accounts for 85 percent of your credit score. Making late payments will damage your credit.

Your credit utilization ratio accounts for 30 percent of your credit score. This is how much money is available to you on your credit cards versus how much of a balance you carry. Lenders like to see low utilization ratios. FICO® recommends keeping your utilization ratio at or under 30 percent.

All you need to do to lower your utilization ratio is pay down the balances on your credit cards. If you pay more than just the minimum payment each month, you can significantly decrease your utilization ratio and boost your credit score.

Applying for a new account prompts a hard inquiry (as opposed to a soft inquiry that won’t affect your credit, like checking your own credit score). Each new inquiry drops your credit score. Applying for new credit accounts for 10 percent of your credit score.

Having one or two inquiries in a short period of time won’t do too much damage. However, you should avoid applying for credit just because it will get you a discount or the interest rate is low. Only apply for credit when you need it.

Applying for New Credit Accounts image

Negative items such as late payments, charge-offs, collections or bankruptcies can cause your score to dip. Even a single negative item could cost you 100 points, and items such as a bankruptcy or foreclosure are especially damaging.

Only the passage of time can remove negative items from your credit report. Here are some examples of how long a negative item can impact your credit score:

A late car payment: Seven years from the first late payment
Going bankrupt: Seven to ten years
A foreclosure: Seven years
Having a debt sent to collections: Seven years from the original delinquency
Paid tax liens: Seven years
Unpaid tax liens: Ten years to indefinitely
To stay on top of your credit, always keep an eye out for inaccurate items and work to remove them from your credit reports.