Repairing Your Credit

Having a poor credit score will affect your financial options. A bad credit rating hurts your options for getting loans or credit cards. This can put a strain on your finances. Lenders may deny home and car loans, affecting your life goals or transportation options. Some landlords may even deny your rental applications for a poor credit score. Even when approved for loans and credit lines, you’ll likely face much higher interest rates and have to put up more collateral.

Specific consumer protection laws protect your rights. It can take time to rebuild a low credit score, but by starting the process now, you can begin the path to achieving your goals. For legal advice about your financial situation, talk to an experienced credit repair attorney.

How Can I Repair My Credit?

The first thing you’ll need to do is look at your credit report. You can generally get a free credit report from one of the credit reporting agencies (CRAs). The big three credit bureaus are: 

• Equifax
• Experian
• TransUnion

Review your credit report to see the problem areas. This can help you know what to address. It’s even possible there are errors in your report. You can dispute credit report errors and potentially get your credit fixed. You may also discover you are the victim of identity theft and that someone is taking out loans in your name.

One of the most likely culprits of a low credit score is a history of late payments. Making all of your payments on time going forward will slowly help you bring up your score.

Late payments can show up on a report in as little as 30 days past due. Falling too far behind on payments for too long could lead to a default. After defaulting, your creditor charges off your debt to a collection agency. This is a huge red mark on your report that will make future creditors wary of loaning to you.

You may also have problems with your credit report if you have too many open lines of credit near the limit. Increasing your credit lines but not adding to the balance could help improve this part of your report.

Younger people may not have enough credit history. Getting a small credit card or two could help you build that up. Be sure to always make your payments on time. It can be easy to fall behind and rack up additional interest.

What Are My Legal Options and Protections To Repair Credit?

Facing a difficult situation like credit repair can leave you vulnerable to unfair or predatory practices. Fortunately, there are consumer protection laws that can help you during the process. These federal laws address some common problems people in your situation can face when trying to improve their credit.

Credit Repair Organizations Act

Consumers with poor credit scores are often the targets of fraudulent or predatory credit repair services. The Federal Trade Commission (FTC) enforces the Credit Repair Organizations Act, which created regulations that credit repair services must follow. For example, they aren’t allowed to require advanced payment for their services. These services cannot provide inaccurate information about their services. Contracts must be in writing, and consumers must have the option to cancel the contract without penalties.

The Fair Credit Reporting Act

Thanks to the Fair Credit Reporting Act (FCRA), the federal government limits who can access your credit report. Creditors, banks, landlords, employers, and insurance companies can review your report after getting your permission. Few others can get a copy of your credit report.

The FCRA also requires a time limit on the items listed in your report. Most negative activities on your report are removed after seven years. This includes defaults, late payments, and foreclosures. Other events, like bankruptcy, can last for 10 years.

This law also allows you to dispute incorrect information on your credit report and gives you the right to credit repair.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) puts restrictions on debt collectors. These consumer rights protections address abusive, deceptive, and unfair debt collection practices. These limit how and when debt collectors can contact you and what they can say to collect on outstanding debts. 

How Can I Get Help With the Credit Repair Process?

When it comes to addressing credit problems, it doesn’t have to be you against the world. There are different services you can use to help you get your credit score back on track. This includes credit repair companies. Be mindful of the relevant laws when working with these groups.

Credit lawyers can also be a valuable help in credit repair matters. An experienced credit lawyer could search your credit report and help clean up credit report errors. They can file disputes on your behalf and negotiate with creditors. Credit lawyers can especially be an essential asset to use if you have to go to court over a credit issue. Contact a credit repair lawyer near you for more information about their legal services.