To better understand what legal credit repair is, it would be helpful to understand a few types of illegal credit repair:
Illegal: Changing your social security number to obtain a clean bill of credit.
If any company should suggest this type of credit repair, report them to the authorities.
Illegal: Disputing every item on your credit report, regardless of nature.
The Fair Credit Reporting Act specifically states that only items that are unverifiable, inaccurate or misleading should be disputed. Items that are clearly yours, and reflect your credit history should not be disputed.
Illegal: Charging for services that have not yet been completed.
This is to protect the consumer from fraudulent companies that charge for services that never get completed (charging to "repair your credit", then hitting the road...)
So, what exactly is Legal Credit Repair?
You have the right to plead "not guilty" to questionable information on your credit reports
Legal Credit Repair consists of removing the questionable items on a credit report
. There are a few different methods of going about this, the most common and effective are:
: Negotiating directly with creditors and asking them to "please" remove questionable items from your credit reports is a viable method of credit repair for mild late-pay accounts. There are no laws that require that questionable items stay on your reports for any amount of time, and creditors have the ability to simply remove these items if they see that it could somehow work to their benefit, even if that simply means a pleased customer.
: The Fair Credit Reporting Act gives you the right to contact credit bureaus
directly and dispute items on your credit reports. Just as in a court of law, you have the right to plead "not guilty" to questionable information on your credit reports, and leave the burden of proof to the credit bureaus. You can dispute any and all items on your credit reports that you feel classify as inaccurate, unverifiable, or misleading. If the bureaus can not verify that the information on your reports is indeed correct, then those items must be deleted.
Does the CCCS help consumers restore credit?
Consumer Credit Counseling Service or CCCS is a non-profit debt counseling service
that assists consumers who are over their heads in debt. CCCS is funded and controlled by the credit grantors and the credit bureaus. Often, CCCS provides a beneficial service to the consumer. Because of the obvious allegiance between CCCS and the credit bureaus, you cannot reasonably expect CCCS to do anything that the credit bureaus would frown upon, such as help you restore your credit. In fact, if you decide to leave CCCS before you have finished their program, they can list your failure to complete the process as a questionable listing on your credit report. When you participate in the CCCS program, your creditors will sometimes (though rarely) note it on your credit report. The fact that you resorted to a debt counseling program is a huge red flag for prospective credit grantors. Remember, paying off your debts is a step in the right direction, but it does not restore your credit.