“You may not know this, but over 90 percent of items on your credit report are either inaccurate, unverifiable or simply out dated”, according to the advertising which the ‘My Credit Shot’ credit repair organization uses to promote its services. Quite where they dream up their statistics is questionable, as is their statement that, “even if you legitimately owe your creditors, think the information is accurate, verifiable, or current; or if you think it can’t be removed, it usually can.”
Credit repair specialists such as My Credit Shot make big money preying on those desperate to rid themselves of the stigma of bad credit. They promise to know special ‘secrets’ which they will use on behalf of their clients. They use misleading advertising to sell their services or products. One agency, Credit Solution Repair, sells a credit repair system which is meant to speed up the process of repairing bad credit. The company states that credit repair is a “long drawn out process” and consumers may “require constant contact with an attorney.”
The simple fact is that credit reports contain information reported by lenders which has to be factual by law. Errors do occur but each of the three main credit bureaus provides a simple online service for having disputed items removed. Factual reporting cannot be removed by a credit repair agency or an individual until it is out of date.
Erroneous information or unverified information must be removed within 30 days. It costs nothing to dispute ones credit and fix it oneself. Credit repair specialists can do nothing legally that the individual cannot do themselves. CROA is the acronym for the Credit Repair Organizations Act which was implemented in law in 1996. It lays out clear guidelines which credit repair organizations must follow.
Written contracts must be issued which outline charges, an estimated time to complete their service, and the services which the company will provide. Contracts must have a clearly defined cancellation period of three days. Companies are not allowed to ask for advance payment before beginning the process of credit repair. They are also bound by to adhere to only legal practices when fixing credit.
There is an obligation to provide the customer with a copy of the ‘Consumer Credit File Rights under State and Federal Law’ which details the rights of consumers to obtain credit reports and dispute information therein.
It is understandable that some consumers with bad credit feel out of their depth and require assistance dealing with the credit agencies and their creditors. Credit repair companies are quick to exploit this and purport specialist skills where none are needed. Considering that an individual who disputes their own credit should expect the matter to be resolved within approximately thirty days, agencies which charge an initial then monthly fee are dragging the process out.
My Credit Shot offers a cheap credit repair package for only $99. This is exactly $99 more than an individual needs to pay to legally dispute their own credit. However those who are in a rush and have many items they wish to see removed from their credit reports can sign up for the flat rate package which will pay for “all repaired items, no matter how many.” The fee of $749 must be paid in advance of the service beginning, which is in breach of the terms outlined in CROA.
Credit Solution Repair does not promise to fix a persons credit. Instead it sells a system which includes a 131 page ebook to assist the individual in fixing their own credit. Those interested can snap up this information which usually sells for $297 for the bargain price of just $69.97.
Alternatively they can access Myfico.com free of charge and make use of the free tools provided to help those who require assistance.
Sources:ftc.gov
Credit solution repair
My credit shot