Four Secrets of DIY Credit Repair That the Credit Companies Don’t Want You to Know

creditIf you have bad credit, you should know that you do have options. Most likely, your bad credit is due to negative entries on your credit report. However, not all of them may be accurate or fair. Although working with a credit repair company is often a good idea, it’s not for everyone. DIY credit repair can also get results, if you are willing to be patient and put in the effort on your own. If you opt to go the DIY route, you should know that it can work. However, most credit companies hope you don’t know that. Here are four things about DIY credit repair that the credit companies would prefer you didn’t know.

DIY Credit Repair Doesn’t Cost a Cent

Repairing your credit can cause a major headache for credit companies. Keep in mind that credit companies are for-profit corporations; they exist to make money. The time and resources they spend sorting out inaccuracies on a credit report are resources that they would prefer to devote to earning more profits. Additionally, credit repair may qualify you for lower interest rates, meaning less money for the credit company. This means they want you to think that credit repair is always expensive and that it will take decades. However, you can repair your own credit without paying a single cent, and you can usually resolve issues fairly quickly. For instance, you are entitled to one free credit report from all three major reporting agencies once per year. However, you will likely have to click around a bit on the agency websites and get past the ads for paid credit reports before you find information on how to get your free credit report. Additionally, you may file a credit report dispute for free with each of the three credit reporting agencies.

Credit Reporting Agencies & Credit Companies Have to Talk to You

By law, you are entitled to receive a free credit report from each credit reporting agency once per year. You are entitled to dispute information that you believe to be inaccurate, and according to the Fair Credit Reporting Act, credit companies are bound by law to investigate each and every piece of information that you claim is false. If it turns out that your report contains errors, your credit company must stop reporting the erroneous information within thirty days. This means you have all the legal authority you need to not only investigate your credit report, but also to force credit companies to stop reporting inaccurate information. They must reply to you within thirty days of receiving your complaint—ignoring you is illegal. You do not need a court order or a letter from an attorney; a factually sound complaint is all it takes.

Credit Reporting Agencies Aren’t Government Institutions

Some people hold the false conception that credit reporting agencies are branches of the government with vast resources and little accountability. In actuality, credit reporting agencies are private for-profit businesses with zero connection to the government. Also known as credit bureaus, credit reporting agencies turn massive profits by selling your information to banks, lenders, and other financial institutions. They are just like any other businesses; they do not have any special rights or privileges and they are not immune to prosecution. This means you can approach them with confidence knowing that they hold absolutely zero authority over you.

Furthermore, credit reporting agencies are bound by certain laws. For example, a credit reporting agency is legally obligated to respect your privacy—a CRA can only share your report with creditors, landlords, employers, and insurance companies. Sharing your private information with anyone else is illegal. Credit reporting agencies cannot include certain information in your report, such as medical conditions, bankruptcies that occurred more than ten years ago, personal information such as your age, ethnicity, or marital status, or any kind of financial information that is more than seven years old.

Credit Companies and Credit Reporting Agencies Get It Wrong More Often Than You’d Think

It is essential that you ensure your credit report accurately reflects your life and that your credit score is a fair representation of your finances. After all, these are the two critical pieces that can determine whether you are approved for a mortgage or if you get the job you want. Once again, credit companies and credit reporting agencies are in business to make money. That means they don’t always do their due diligence when providing information. A recent study by the Federal Trade Commission found that the credit reports of one in every four consumers contain erroneous information, and half of those erroneous reports actually resulted in a noticeable change in credit scores. Eighty percent of consumers who filed disputes about the false information saw a change in their credit report. If your report contains inaccurate information, it could be hindering you in your quest for a mortgage or business loan. However, no major organization wants to admit that its most sensitive data (data which affects the entire population) is inaccurate. DIY credit repair can correct these errors and help you get access to lower interest rates (meaning less money for the credit companies).

These are the four major secrets about DIY credit repair that the major credit companies want to keep under wraps. Money is a powerful motivator, and when you’re dealing with businesses as large as credit corporations, it can feel like a David-and-Goliath situation. However, arming yourself with the facts will make you well prepared to restore your credit.

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