a couple calculates finances to perform a credit repair at home

Credit repair companies charge hundreds (sometimes thousands) of dollars to fix your credit.

Any small financial mistake can send an account to a collections agency. An account in collections on your credit file is terrible and will hurt your credit score. The frustrating part is that your internet service provider, a hospital, or any other organization that sends your account to collections could easily make such a mistake. That mistake could ruin your life for years.

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Performing a DIY Credit Repair

  1. Request your free credit reports from each of the three bureaus. It is easiest to do this via their websites, but if you want to feel more serious, you can write to them via snail mail.
  2. Under the Fair Credit Reporting Act of 1970, you have the right to remove inaccurate information within 30 days of receiving the reports. We recommend making this request via postal mail, because you’re playing for time here. If a credit bureau does not respond within 30 days of your letter, you win by default and the information in question is removed!

Credit repair companies follow these same steps. Why pay them when doing it yourself is easy and removes a middleman?

Account Sent to Collections Example

doctor consults patient at a hospital about bill related to hospital services as part of credit repair

Let’s say a small hospital bill of $60 that you never received gets sent from the hospital to a collections agency. If you dispute it, the hospital – not the collections agency, must produce the original bill within 30 days. From the hospital’s perspective, the account is effectively closed because they sent it to collections. Producing the original bill does not benefit the hospital; it’s only extra work. The hospital often does not produce the original bill that the credit bureau requests.

When companies and hospitals do respond, you can escalate further using legal threats. Because the credit bureaus are liable under the Fair Credit Reporting Act for incorrect information, you can sue them for damages. Remember that these credit bureaus are gigantic corporations that do not care about small individual claims (or your credit score, for that matter). When hit with a consumer lawsuit, the bureaus can either fight it in court or remove the incorrect information from your credit report. As you might think, the bureaus usually remove the information and call the case closed. Even if that doesn’t happen, the legal teams at the credit bureaus are incentivized to settle lawsuits well before a trial is held.

Always dispute inaccurate credit reporting info! And always keep your credit frozen when not using it.

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