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What is Legal Credit Repair and How Does Legal Credit Repair Work

April 12, 2010 No comments

What is Legal Credit Repair?

Legal Credit Repair is the means to legally correct the inaccuracies on your credit report. Under the Fair Credit Reporting Act the Federal Trade Commission was empowered to oversee Credit Reporting Agencies to ensure that they are abiding by the federal laws on credit reporting to protect the consumer and the United States banking system. You can download a link to the actual Fair Credit Reporting Act Here. You can repair your credit yourself by learning the Fair Credit Reporting Act and ensuring that your credit is being properly reported by the three major credit reporting agencies.

What is the Fair Credit Reporting Act?

Passed originally in 1970, the Fair Credit Reporting Act (FCRA) is a federal law, enforced by the Federal Trade Commission, enacted to regulate collection, dissemination, and use of consumer information including consumer credit information. In 2004 a studied was released by the U.S. Public Interest Research Group that showed as many as 79% of all consumer credit reports had errors on them. This is the purpose of the FCRA, to protect consumers and the integrity of our banking system against errors by consumer reporting agencies. In 2003 the Fair and Accurate Credit Transaction Act (FACTA) was passed by congress to allow consumers a the ability to view the information reported against them and the means to dispute inaccurate information. You can get a free credit report annually by going to anualcreditreport.com

How Does Credit Repair Work?

Based on the FRCA, the inaccurate information in a consumers credit report is disputed to the three major credit repositories. The credit reporting agencies (CRA) then forward the dispute to the creditor and they must respond. If they do not respond in a timely fashion or the CRA must remove the disputed information from the consumers credit report. This of course is a simplification of how does credit repair work but it is the basis for you improving your credit score by removing negative items from your credit report.

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