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Legal Credit Repair What Is Legal and Illegal


You have probably heard individuals say that credit repair is illegal or impossible, or maybe you are just already aware that some individuals and credit repair firms use less than ethical tactics. We are going to briefly review what is legal and tactics you should use to fix your credit.

What Is Legal Credit Repair

Legal credit repair is defined by the Fair Credit Reporting Act, a federal law passed by Congress, this law is what gives you the right to dispute your credit report. You can file a dispute for any and every item on your credit report even if you know it is an accurate listing.

The law simply says that any item you believe is questionable or incorrect you can dispute. There has never been a consumer and never will be a consumer that ever faces legal or civil consequences for disputing a bad credit item on their credit report, even if they knew it was correct.

However just because you have an item on your credit report that is accurate and was your debt does not mean that it should still be there. You can dispute an item on your credit report because it has the wrong date, the balance owed is not correct, the account is paid…

The most common dispute reason is because a debt account is older than seven years, by law no debt can legally be reported on your credit history for more than seven years. Frequently collection agencies will try to report your debt account for much longer than the seven-year window and they often get away with it.

Collection agency uses this as a tactic to manipulate and force you into paying the debt. However it is entirely illegal for a collection agency to report your account in such a way but it is common occurrence in the debt collection industry. This seven-year window begins to tick away the moment you miss your first payment with the original lender.

For example, with an unsecured credit card you stop making your monthly payments. After about 6 months the credit card company will charge off your account which means they can take a tax loss for the account.

The credit card company will also sell your account to a collection agency. Let us not forget that the credit card company has also reported negative information on your credit report. It is probably being reported as a charge off account which will hurt your credit score tremendously.

This new collection agency will start to contact you trying to collect payment on the debt account. This new collection agency also can legally report negative information to the credit bureaus about your account, and they can sell your account to yet another collection agency if they are unable to collect payment from you.

The number of times your debt account gets sold will be directly related to the size of the debt. The larger the debt the more times it will be sold. Collection agencies buy debt accounts very cheaply and there is even record of one agency buying accounts for less than $.03 on the dollar. This means on $100 account they purchased it for $3 but they will ask you to pay $100!

It is common practice for collection agencies to view debt accounts as brand-new and having a full seven years to be negatively reported to the bureaus, from the date the collection agency purchased the account. For example if your credit card account got purchased after it was already 3 years old, the collection agency that purchased it would think that they could report that account information for seven years from the date they purchased it. In other words you would have that account on your credit report for 10 years instead of the legal 7 years.

Your credit score is never been more important than this today and it is your responsibility to protect it. You not only have to worry about managing your own money but you also have to worry about lender mistakes, and record keeping errors.

It is estimated that 25% of all credit reports have a blatant error or mistake on them. This could be the difference between approval and rejection, don't let it be for you.

About Author Jayson Vansteins :

For more about legal credit repair and how you can file a Transunion dispute and remove negative information on your credit reports call 1-800-298-4297 and get a free credit consultation or visit us - <a href="" target="_blank"></a>

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Article Added on Thursday, April 18, 2013
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