Repairing credit history
Two acts that help to facilitate efforts to repair credit history include the Fair and Accurate Credit Transactions Act (also known as the FACT Act), which has been developed from the former Fair Credit Reporting Act (or FCRA), and the Fair Debts Collections Practices Act (FDCPA).
The FACT Act allows you to receive a copy of your credit report free once every twelve months, and also regulates (among other things) who is able to access your credit information and how it can be used. It is important to monitor your credit history on a regular basis and identify any errors that may negatively affect your credit rating. The credit report will highlight any items that warrant credit repair efforts.
The purposes of the FDCPA are to prevent abusive debt collection practices and to give consumers an avenue to require validation of various debt information and, if necessary, to dispute items and have them removed, if the creditor cannot prove their accuracy within a period of time. Generally, creditors have 30 days to respond to consumer requests.
These acts can be used to a consumer’s advantage, as outlined by credit repair services websites. These service websites offer to contact creditors on behalf of their clients in order to demand proof of the original late payment, charge off, collection action, etc. and, when the creditors fail to respond with the proof, as they often will, the services will report this to the credit reporting agencies (Equifax, TransUnion, Experian) in order to have the negative credit information removed.
Entry Filed under: Credit history, General