What is Credit File Repair?

When people talk about credit repair, what they really mean is credit file repair:  that is, updating and correcting the file from each of the three credit bureaus.  Typical credit file repair works like this:

While credit file repair can seem straightforward on the surface, there are many factors that complicate the process. One of the major stumbling blocks many people run into is the fact that whether or not the credit bureaus decide to investigate rests solely with them. Likewise, your creditors do not have to verify any information if they consider your request to be “frivolous”.

What that means for you is, if you want your credit file repair to progress successfully, you need to have a strong case, ideally with documentation to back up your position.

Credit File Repair: Types of Errors

The most common problems that people generally target for credit file repair include errors in the amount of a current debt, errors in the payment date(s) of a current debt, charge-offs with errors in the date or amount, and collection accounts that either do not have accurate records (wrong name, wrong address, etc.), or that are reporting incorrect information.

Additionally, if the collection account is older than the credit reporting limit, then it must be removed from your credit file, regardless of accuracy. Generally speaking, this is 7 years for most debts, but may be up to 10 years for things like bankruptcy or unpaid judgments.

Credit File Repair: Common Mistakes

The biggest mistake most people make when it comes to credit file repair is confusing the credit reporting limit and the statute of limitations or “time-barred” debt. While the statute of limitations for suing and collecting a judgment varies from state to state, the reporting limit does not.

Therefore, it is entirely possible for a collection account to be time-barred – that is, the collection agency can’t sue you to recover the money – while still being within the statute of limitations for being reported on your credit file.

What this means is, while the collection agency cannot do anything to force you to pay, they don’t have to remove the negative item if it is accurately reported. The only remedy in this instance is to wait for the time to run out for reporting the negative item on your credit report – once this date is past, you can dispute the negative entry and it will be removed.

Another common mistake that many consumers make when it comes to credit file repair is assuming that one account cannot appear on their credit report twice. Unfortunately, this is not always the case.

If you have an account that has been charged-off – that means the original creditor has written off the debt – that entry and the entry from the collection agency that buys the debt will both be on your credit report, and they both have a negative effect on your credit scores.

The best option is to avoid a charge-off situation when at all possible and work out payment arrangements before you are 60 days past due. However, if you already have a charge-off account on your credit file, the next best option is to try to work with the original creditor and get them to accept payment – by doing so, you will most likely be able to dispute and remove the collection agency account, and reduce the damage to your credit scores.

Credit File Repair: Getting Professional Help

Not everyone needs help with credit file repair – some people only have one or two negative items that are easily taken care of through the typical dispute resolution process. However, if you have a large number of past due accounts, collection accounts, judgments, or other negative information on your credit file, you may need the help of a credit repair professional to get it all sorted out.

This is particularly true of older debts where you may not have all of the necessary documentation to prove your case – in this instance, having a professionally-worded dispute can be the difference between getting credit file repair and seeing your complaint ignored for being “frivolous”.

In the end, credit file repair takes patience, diligence and willingness to follow-up with all three bureaus for every single negative entry that is inaccurate. By taking the first step and disputing these errors, you are taking back your financial freedom and getting that much closer to your goals. Whether you do it on your own or with the aid of a professional, the sooner you get started, the sooner you can look forward to all the benefits of a clean credit record.

And it’s no wonder – with so many scam artists out there, it can seem as though credit repair is nothing more than wishful thinking.

Fortunately, that’s not the case. Credit repair is perfectly legal and more than that, it is your right as a U.S. consumer. Anyone, no matter their income, no matter their current debts or other issues, is legally entitled to a fair, accurate representation of the information on their credit report.

Is Credit Repair Legal? Here are the Facts:

The first step to repairing your credit is to see what is on the credit report. Fortunately, your credit report is easily accessible:

• You have the right to get a free credit report from each of the credit bureaus at least once every 12 months.
• You may be entitled to more than one free credit report every 12 months depending upon the state you live in.

You can also receive a free copy of your credit report if ANY of the following apply:

• You have been denied an application for credit. This means any type of credit, whether it is a credit card, loan, or some other type of financial instrument.
• You have been denied insurance – including homeowner’s insurance, renter’s insurance, car insurance, or health insurance.
• You have been denied employment – if a potential employer pulls your credit report and decides not to hire you on the basis of what is found, you are entitled to a copy of your credit report.
• You are currently unemployed and plan to look for a job – you can request a copy of your credit report if you are planning to look for work within the next 60 days.
• You are on welfare – no other requirements here, if you are on welfare, you qualify for an additional free report
• You are a victim of identity theft – as long as you file a report with the police to alert them of the fraud, you are entitled to a free credit report to help assist with your credit repair efforts

Once you have your credit report – or you’ve supplied your credit report to a reputable credit repair agency, the next step is identifying the kinds of information that can be removed. You have the right to have any inaccurate or outdated information removed from your credit report, safely and legally.

A professional credit repair agency will help you to understand the next steps, and what you can do to effectively dispute the errors and improve your credit scores. One thing to keep in mind – while you can easily get copies of your credit report for free, getting copies of your credit scores will almost always require that you pay a fee.

Is Credit Repair Legal? Why Credit Repair can be Difficult

Despite the fact that credit repair is legal and free (except for the time it takes you to do all the research and write all the letters) many people get confused or intimidated when it comes to exercising their rights.

One of the main reasons credit repair can be difficult, even though it is perfectly legal, is that the credit bureaus and creditors may not uphold the spirit of the law. Credit bureaus and creditors are required to investigate your disputes unless they decide it is a frivolous dispute.

Because the ultimate decision rests with the credit bureaus and the collection agencies themselves, they will often look for any reason to ignore the dispute. Reputable credit repair companies make it more difficult for the bureaus and collection agencies to ignore you because they know the rules to follow and the information to include in every dispute.

Is Credit Repair Legal? Recognizing the Scams

While ethical credit repair is perfectly legal, there is one tactic that will get you in trouble with the law:

Attempting to “Segregate” Your Credit Files –

You cannot legally start over with a “new” credit file. When credit repair companies claim that they can get you a new credit file, they will tell you to apply for an EIN – Employer Identification Number – and use that number when you apply for credit.

An EIN can only legally be used by a business entity, and trying to use one for your own personal credit is illegal and constitutes fraud. Even if you were only following the advice of a credit repair company, you will be the one held liable.

Is Credit Repair Legal? Final Thoughts

Once you’ve taken the time to explore your legal rights when it comes to credit repair, it’s easy to see that not only is credit repair legal, it’s an essential way to help manage your finances. By ensuring that only accurate and timely information remains on your credit report, you give yourself the best chance at qualifying for the credit terms that you deserve.

Don’t wait to get started with credit repair – the sooner you begin, the better your credit scores will be in both the short term and the long term.

In order to effectively repair your own credit without a credit repair agency, you have to be able to write effective dispute letters, and you have to be willing to keep up with stringent deadlines and tracking to confirm that the credit bureaus and your creditors are working within the law.

Why You Need a Credit Repair Agency

Most people have daily lives to attend to – work, school, kids, outside obligations – and it’s all too easy to let a deadline slip past. Once that happens, you’re stuck with the whims of your creditors and the debt collectors, who certainly don’t have your best interests at heart.

A credit repair agency makes the process more efficient and effective by:

• Managing the entire dispute process across all debts and collections
• Keeping track of deadlines, mailings, and correspondence for all creditors
• Providing a simple means for you to track the progress of your credit repair
• Preventing bill collectors and creditors from harassing you about the debt

If you have multiple delinquent accounts, are dealing with continual harassment from collection agencies that do not respect your requests to stop contacting you, or are just plain confused about the process, a credit repair agency is the ideal solution to the problem.

DIY vs. Credit Repair Agency

What a Credit Repair Agency Can Offer You

The bottom line is that credit repair takes time, effort and discipline to stay on top of all the requirements. A credit repair agency can help you with that by keeping track of everything so that you don’t have to.

If you are one of those people that are already paying for services like credit monitoring and identity protection, adding a credit repair agency to the mix can make improving your credit score that much easier.

In the end, it all comes down to how much your time is worth, and how much time you can afford to put into repairing your credit on your own. One important thing to consider – you will still be required to provide some information, even if you do have a credit repair agency working for you, so you will need to keep careful records so that all relevant information gets to the credit repair agency that is helping you.

Credit Repair Agency: Tips to Get the Most out of Your Investment

If you’ve decided to go with a credit repair agency, there are a few things you can do to make the investment pay off even more. Here are our tips for making the most use out of the assistance a credit repair agency provides:

• Ask Questions – Credit repair agencies are staffed by credit experts, but that doesn’t mean you have to stay in the dark about their processes. Find out exactly how they plan to handle your current credit problems and what they recommend if the problem should reoccur in the future.

• Take Advantage of Supplementary Services– Some credit repair companies will advise you on more than just disputes and removing negative information. If you choose one of these companies, make sure you take advantage of all the services to which you are entitled. Get advice on how to build up new lines of credit, monitor your credit scores, etc. Not taking advantage of every service that’s offered is leaving money on the table.

• Don’t Be Afraid to Switch Services – Most ongoing credit repair services charge month-to-month, so if you aren’t satisfied with the results you’re getting, you can often switch to a new service without much hassle. The important thing is to make sure you are getting your money’s worth from the company or attorney that handles your credit repair issues.

The most important thing to remember with any credit repair agency is that you are still in charge – you don’t have to be “hands off” even if you do hire a credit repair agency to help you get your scores up. Once you’ve chosen a reputable credit repair agency, continue to monitor and make sure that your credit is improving and that your scores are going up. It is your credit and you need to take action and ensure that your credit problems are being handled quickly and professionally.

Despite the negative publicity surrounding these types of dishonest companies, there are still thousands of people who have tremendous success with professional credit repair services each year. These legitimate credit repair companies provide a necessary service for anyone who needs help getting their credit back on track.

Finding the Best Credit Repair Company

Once you weed out the obvious scammers (be particularly wary of any small, local companies without any reputation to back them up) it may still seem as though there are far too many credit repair companies to choose from. Fortunately, you can usually narrow the field further just by taking into account:

• Experience – What kinds of credit problems has the company handled in the past? Do they mention your specific issues? Is the company well-established or is it only a few years (or months) old. Decide whether you’d feel most comfortable with a well-established company or a newer company.
• Results – Is the company truly able to deliver on their promise of credit repair? How many satisfied customers are there? If they have testimonials, do they seem authentic?
• Availability – What kind of case load does the company have, and can their agents/professionals keep up? Is the company legally permitted to do business in your area? What kind of turnaround time can you expect?

Don’t just choose the first credit repair company you find that meets your preliminary expectations. To truly find the right credit repair company for you will require deeper research so that you can be sure your credit will have the best chance of improving.

How to Choose the Best Credit Repair Company

Choosing the best credit repair company for your particular situation can be broken down into a 4-step process:

1. Evaluate your situation.
2. Evaluate the credit repair companies.
3. Narrow your choices.
4. Choose the best fit.

The first step in choosing the best credit repair company for you is to honestly evaluate your present credit situation. Are you behind on just a few bills, or are there several? How much debt do you owe? Are there charge-offs on your account? Have you recently filed for bankruptcy? The answers to each of these questions will affect how much any reputable credit repair company is able to help you.

Once you’ve taken inventory of your current credit situation, you’re ready to start shopping for the best credit repair company. Take the time to talk to several companies about your specific situation. Reputable companies will always want to make sure that you are a good fit, so be wary of a credit repair company that tries to force you to make a snap decision.

Most credit repair companies will give you a free consultation, and you should take advantage of that and find out exactly what you’ll be getting before you sign on the dotted line. Make a list of your most-wanted features and services. Do you want help with more than just basic disputes? Do you need credit score monitoring as well? Narrow down your choices based on which credit repair companies offer the services that you value most.

You may find that some credit repair companies will offer most (but not all) of what you are looking for, so it’s important to rank which services matter most to you. This will make it easier to choose objectively.

Making the choice as to the best credit repair company for your needs at this point should be fairly simple – choose the credit repair company that offers the most features at the price that best fits your budget. Never spend more on credit repair than you can reasonably afford. That said, having the peace of mind that comes from reputable credit repair services is well worth the investment.

The Best Credit Repair Company: Taking Action

All the research in the world is no good if you don’t take action. If you’ve followed the plan so far, but you find yourself hesitating, then you must ask yourself what is holding you back. Is it fear of dealing with your creditors? Do you feel completely hopeless that your scores will improve?

No matter what the reasons behind your indecision, the best choice you can make is to move forward, despite uncertainty. Once you make the commitment to clean up your credit score, you have to follow-through if you want to see results. The best credit repair company is only going to work if you give the company a chance to actually perform the service. So don’t wait – start cleaning up your credit and get the financial rewards that you deserve.

Because all three bureaus have their own quirks in how they rate your file, it is quite likely that your credit score will vary between Equifax, Experian, and TransUnion. This also means that any inaccurate information that is on one report may or may not be on the other two – which is why some lenders may approve you for a loan when they pull your credit report versus another lender who denies you elsewhere.

There are three areas where your credit scores may be impacted, outside of major negatives such as bankruptcies, foreclosures and judgments:

• Delinquencies
• Collection Accounts
• Charge Off Accounts

As you can see by the charts below, there is wide room for improvement by getting inaccurate and damaging information off of your credit score, and the sooner, the better:

How Do I Clear My Credit of Delinquencies?

If you’ve been 30 days or more past-due with your bills, you may find delinquencies listed on your credit report. While these delinquencies are definitely damaging, they can sometimes be easy to fix.

Start with the late payments that are the most past-due, i.e. the 90-day and 120-day debts. The reason to start here is because these are the accounts that are most damaging to your credit scores, and they are also the accounts that are most likely to be sent to collections or charged off.

If you can make a payment that will bring you current, you should call your creditor and be prepared to negotiate. If these delinquencies are for an account that is currently open, you have some leeway here.

Ask the creditor if they will be willing to re-age the account (in this instance it works in your benefit if the account is still open and you want to keep it). This will effectively let them update the account as being paid on time, rather than showing a history of past-due payments.

For the 30-day and 60-day accounts, if you have any paperwork that shows you made or mailed the payment within that 30-day window, you should call up the creditor and dispute the derogatory listing. Many times, creditors are willing to work with a good customer who is only rarely late with payments.

Otherwise, you will have to make your complaint in writing with the credit bureau and your creditor in order to get the inaccurate information updated.

How Do I Clear My Credit of Charge Offs?

Debt that has been charged off has a greater negative impact than late payments. Creditors don’t like to see debts that haven’t been repaid, and are much less likely to extend credit to you while charge offs are on your report.

Some loans, such as mortgages, require that all charged-off debt be settled or paid off before you can qualify, no matter what your credit score happens to be. Getting your credit clear of a charge off will take more work, but it is possible.

You will need to:

• Contact the creditor and ask if they are willing to settle – this can be done by phone or by letter, but the most effective way to have proof of the settlement is to get everything in writing.
• Make the payment in certified funds – so you have proof the debt is paid.
• File a dispute with the credit reporting agency, and use your proof of payment to support having the disputed charge-off removed.

Sometimes you’ll luck out, and a creditor that has been paid won’t bother to respond to the dispute because they have payment in hand. This will get the item deleted from your report entirely.

Other times, the creditor will update your account to say ‘Settled’ which is still better than having an unsettled charge off on your credit report, but it won’t help your scores as much as the deletion.

How Do I Clear My Credit of Collections?

Collection accounts are usually the most complicated issue on anyone’s credit report. These are the collection accounts that have been sold to debt collection agencies – sometimes multiple times. The collection agencies have zero interest in helping you. They only care about being paid as much as possible.

However, there are some bright spots when it comes to getting your credit clear of collections:

1. If the debt is past the reporting limit (generally more than 7 years old) then the collection agency cannot list it, and you can dispute the information to have it removed.
2. If the collection agency has reported the wrong date, the wrong amount, or other erroneous information, you can dispute that as well and have the negative listing deleted.
3. You have 30 days to request validation from the time the creditor first contacts you. In this time, they cannot perform any collection activities and they cannot add the debt to your credit report while the investigation is ongoing.

For older debts especially, collection agencies are often unable to come up with accurate information that proves they own the debt and that you owe it – so it pays to dispute any inaccurate information, more often than not.

Understanding these basics to clear up your credit will put you on the right path, but it’s only the first step. The sooner you get actually get started repairing your credit, the better off you’ll be, both financially and emotionally in the future.

The FTC regularly warns about credit repair scams, and even provides a list of warning signs to help the average consumer make an educated choice. However, it’s important for those same consumers to realize that reputable credit repair companies like Lexington Law are not a part of the problem.

To help debunk the myth that all credit repair companies are scams, we will go line by line down the warning signs the FTC has on its site, and compare their warnings with the best practices and procedures performed by Lexington Law.

Understanding the difference will help you to understand why not all credit repair companies are the same, and will show that these scam practices do not occur in reputable credit repair agencies such as Lexington Law.

How Lexington Law Stacks Up

The FTC points out six major signs that indicate a company is “up to no good”:

• Asks for payment up front
• Doesn’t tell you your rights
• Recommends that you do not directly contact credit bureaus
• Tells you they can get rid of accurate & current negative information
• Suggests that you use an EIN to get a new credit identity
• Recommends disputing all negative information, even if accurate

Taking these items one by one, Lexington Law proves that not all credit repair agencies are scams.

1. Lexington Law does not ask for any payment up front, and in fact only bills after the work you’ve agreed to has been completed.
2. Lexington Law is very up front about your rights and what you can do to improve your credit. They don’t try to make it seem that you can’t go to the credit bureaus yourself, and they describe their services fully so that you can make an informed decision.
3. Lexington Law contacts the credit bureaus directly on your behalf as part of the services they perform for you, but nowhere do they suggest that you cannot contact them.
4. Lexington Law does not make any assertions that they can get rid of accurate and current negative information – they are all about disputing inaccurate information and helping you to improve your credit scores legally.
5. Lexington Law does not try to get you to build a new credit identity – they work to clean up your current identity and deliver real results you can see in terms of deleted items on you report.
6. Lexington Law specifically states that they do NOT recommend that any consumer (client or not) attempt to dispute items they know are accurate and timely.

Another important fact:

The credit bureaus are only required to investigate your dispute if they believe it is not “frivolous”. This means that the credit bureau is free to ignore any of your disputes that you file on your own, as they alone decide what constitutes a frivolous dispute. By hiring a reputable credit agency like Lexington Law, it makes it much more difficult for the credit bureaus to ignore your valid disputes on inaccurate information.

Lexington Law & Results

On the date of this writing, there are over 200 testimonials on the Lexington Law website from former and current clients that are getting positive results on their credit scores. In addition to that, Lexington Law also claims to have removed 1,297,226 items from credit reports in 2010 across all three credit bureaus.

While no credit repair company can guarantee results, Lexington Law has an impressive track record for helping consumers professionally and in a timely manner. In addition they offer a free credit consultation – something that the scammers just won’t do.

Who Should Choose Lexington Law

So if Lexington Law is a legitimate credit repair company, the question remains: is it the right choice for you? Fortunately, there are some easy questions you can ask to help you decide.

Do you…

If you answered yes to even one of these questions, you could likely benefit from having a professional credit repair agency like Lexington Law help you get your credit score back on track.

The most important thing to remember is that you do have options. Bad credit is not something that you have to live with – there are things that you can do that will improve your scores and help you to have the kind of financial freedom you deserve.

Quality credit repair companies like Lexington Law provide a valuable service for consumers and can help them to get better results than going it alone. Don’t wait around for your credit to improve — the best thing you can do is to take the first step and start fixing your credit now, whether you do it on your own, or rely on a reputable credit repair agency like Lexington Law.

Why Special Financing is Not How to Fix Your Credit

In the current economy, retailers realize that they are competing heavily for every dollar spent by consumers affected by the credit crisis. Because of this, many are offering promotional 6-month, 12-month, or even 24-month financing with no interest.

On the surface, it seems like a great deal if you can get approved – get your holiday shopping done now, and pay it off over the course of the next year. However, the deeper and you’ll find that the terms and conditions are riddled with pitfalls designed to make sure you end up paying more (possibly even more than you can afford). Make no mistake about it, the Black Friday shopping event is designed to put retailers “in the black” for the year, not to save you money.

There are many reasons these holiday promotions just don’t add up, but there are three main “gotchas” that will keep you from fixing your credit if you fall into the trap:

Gotcha Number 1: Those special promotional rates are (generally) only available for high-priced purchases.

That means you’ll have to spend more, and in so doing, your debt-to-credit ratio will rise. Having high balances on any credit account actually lowers your credit scores. Once you factor in the cost of the interest rate if you don’t pay it off in full by the time the promotional period ends, you could lose any savings from the discount price.

Gotcha Number 2: If you miss a payment (even if it’s only by a day, or a few hours!), a penalty interest rate is generally applied, sometimes retroactively, to your balance.

If you’re a month late, you’ll get dinged on your credit score twice! Once for the late payment, and again as the interest retroactively applied to your balance will increase your debt-to-credit ratio. With a 30% or more penalty interest rate, you can actually wind up paying more for your items than if you’d bought them at full price.

Gotcha Number 3: If you don’t pay off the entire loan by the end of the promotional period, you’ll have to pay the interest on the entire purchase, not just the last few months you have left. Again, this negates any savings you may have thought you had.

Even if you manage to pay on time and avoid the interest penalty, those great introductory offers can quickly spiral out of control once the promotional period ends, and the lower your credit score, the more you’ll potentially pay in retroactive interest:

Being Grateful for Credit Repair

Current credit laws in effect have helped to offset some of the more damaging tactics that credit card companies used to employ, which means consumers have something to be grateful for from the start. Under the most recent consumer credit laws, credit card companies have had to stop unfair practices such as:

• Increasing interest rates without notice – you are now entitled to at least 45 days’ notice
• Charging multiple over-the-limit fees in one month – companies can only charge one over-the-limit fee, and only if you opted into allowing charges over the limit.
• Double-cycle billing – no more interest charges from the prior month’s purchases.
• Forcing you to pay off low-interest balances first – companies are required to put any excess payment towards higher interest balances first, which helps to save you money.

But even with all of these changes in consumer credit law, the real key to being grateful for credit repair is to take action and do something to improve your situation now, rather than ignoring your credit worries and waiting for the problem to go away on its own. (It almost never does.)

Correcting incorrect information on your credit report could save you hundreds, if not thousands of dollars a year in excess fees and interest, but you have to make credit repair a priority if you want to be able to reap the benefits.

What Mortgage Rate Could You Qualify for After Your Credit Repair? 

The money you save grows exponentially as your credit score increases, which creates a snowball effect – the better your credit rating, the more money you have to enjoy your newfound financial freedom. And because current lenders may regularly reassess your credit limits and interest rates based on your credit score, you have the potential to save even more as time goes on.

Rather than a vicious cycle of poor credit and high interest rates leading to maxed-out limits and higher fees (which in turn lead to lower credit scores), you instead have a virtuous cycle of credit gains that bring you closer to your financial goals.

The Positive Benefits of Credit Repair

If you take the challenge of credit repair as an opportunity to improve not only your credit, but your finances as a whole, multiple benefits emerge:

• Lower interest rates – not only for credit cards, but for mortgages and car loans, as well as personal loans. This means you are able to get the things you want and deserve in life without having to pay outrageous fees.
• Better insurance premiums– on everything from renters insurance and mortgage insurance to car and health insurance. These companies reason that if you have a good credit score, insuring you is less risky, and therefore you pay less.
• More job opportunities – many employers now check credit scores before extending a job offer. People with higher credit scores stand out from others with similar skills and resumes, so if you’re in the job hunt, improving your credit can expand your options and improve your chances of getting hired.
• A sense of empowerment and less stress – for many, the biggest benefit of credit repair is being able to get up in the morning without dreading the calls from bill collectors or collection notices in the mail.

In many ways, credit repair not only reduces stress, but improves quality of life as a whole.

Getting the Help You Need to Repair Your Credit

Some people tackle the task of credit repair on their own, but for many the idea of taking on the credit bureaus directly is daunting. People may be uncertain as to what items to dispute or how to find out if the item listed on their account is from the current creditor or a collection agency that is trying to collect on a bill that is well past the statute of limitations.

This is where a professional can be helpful. By completing the paperwork for you and guiding you through the process, you get the support you need begin repairing your credit without having to become a credit repair expert on your own.

If you’re ready to take the first step, our website has all the information you need to get started with credit repair, whether you decide to do it yourself or hire an expert. As we express our gratitude throughout the season and the holiday, make sure you add credit repair to the list of things you’re grateful for in your life.

Prior to the passing of the Fair Credit Reporting Act, banks and other lenders were largely unregulated and they would loan money and deny loans at their own discretion. The FCRA protects consumers from being discriminated against due to race, ethnicity, family, and other subjective means of determining an individual’s ability to repay a loan.

What does the Fair Credit Reporting Act do for you?

The Fair Credit Reporting Act serves three main functions in protecting consumers like you:

1. Regulate consumer reporting agencies – According to the FCRA, consumer reporting agencies are required to provide consumers with a free copy of their credit report once a year – Learn how to obtain your free copy here. The consumer reporting agencies also must provide a way in which consumers can dispute incorrect items from their credit report. Finally, the FCRA outlines how long a negative item can remain on an individual’s credit report. Typically, items remain on your credit report for seven years, but can be as long as 10 years in cases of bankruptcy.

2. Regulate credit information providers – The FCRA regulates the companies that can provide information about a consumer’s credit history to the credit reporting agencies. These information furnishers typically include banks, credit card companies, courts, and other kinds of lenders. These companies are responsible under the FCRA to provide accurate information to the credit reporting agencies, notify customers when negative items are about to be put on their credit report, and investigate disputes which come through the credit reporting agencies.

3. Regulate the users of consumer credit information – Lastly, the FCRA is designed to protect who is permitted to access an individual’s credit history. The FCRA limits credit inquiries primarily to lenders, insurance companies, and employers. In addition, these users must notify the consumer when a negative course of action is taken as a result of items included on a credit report.

How can you make the Fair Credit Reporting Act work for you?

The FCRA is can be an extremely useful tool in protecting consumers. It enables consumers to know more about why they are denied funding, as well as what they can do to secure loans in the future. Disputing negative items on your credit report can help you improve your credit score.

Luckily, you don’t have to learn all the rules and guidelines of the FCRA in order to put it to use in your life. Companies like Lexington Law specialize in helping consumers use the FCRA and others laws to your full advantage. You can sign up with Lexington Law and have them do all the hard work for you as you get your financial welfare on the right path by repairing your credit.

1. Keep a Spending Journal. Often, it’s not the big purchases that can cause problems, but instead, several small purchases that add up. Fast food, movie rentals, and other little conveniences we take for granted can quickly add up. By keeping a diary of exactly what you spend on a daily basis, you can track precisely where your money goes when you make these ‘unseen’ purchases. Once you understand your own spending habits, you’ll be better prepared to stick to your financial goals when temptation arises.

2. Create a Budget. This goes hand-in-hand with your spending journal. In order to control your spending, you have to set reasonable limits. Look at your bills and see where you can cut back, as well as areas that you may need to spend more in order to reach your goals – putting away more money into your health savings account may be useful if you are planning to have a major procedure, and want to avoid maxing out a credit card, for instance.

3. Prioritize. When you are setting goals for improving your credit, prioritize what’s most important. Getting current on everything at once may not be possible, but you can decide to get current and stay current on those cards that are charging the highest fees, for example. Once you’ve met one goal, move on to the next – credit repair is a dynamic process, and as long as you are willing to move forward, you will see positive results.

4. Make a Wish List. Don’t forget to reward yourself (within reason) as your credit scores improve. Try to think of ways to treat yourself that won’t put you back into debt. Save up for a well-deserved vacation, or treat yourself to dinner and a movie twice a month. The trick here is to find something that will motivate you, without breaking the bank.

5. Automate Your Bill Pay. If you find that you are often charged late-fees because you forget the payment due date, why not pay automatically through your bank? Most banks now offer online bill pay as well, so avoiding late fees and the damage to your credit scores can be as simple as a click of the mouse.

6. Keep Track of Your Progress. Don’t forget to check your credit report and scores to gauge your progress after several months. Everyone gets one credit report per year for free – and people in some states get 2, so check your local regulations. Make sure that companies are reporting your timely payments accurately, and don’t forget that you can dispute inaccurate information on your report. If you need help with the process, work with a reputable credit repair agency to get the job done.

The ‘trick’ to credit repair is in knowing that it is an ongoing process. As you move towards your financial goals, always be willing to incorporate ways that will make it easier for you to succeed.