Posted in Finance, Accounting and Economics Terms, Total Reads: 590
Definition: Credit Repair
Credit repair is the process of identifying negative information pertaining to the credit report of an individual and eliminating or fixing any mistakes that may have led to a bad credit rating. Any accurate and legitimate negative information on the credit report cannot be removed. Credit repair organizations provide services to dispute any information on the report that is deemed inaccurate by an individual.
Credit repair may involve fixing of simple misunderstandings or in some cases, may involve issues that require legal or financial expertise. Credit repair companies look for any negative information that has been removed from the credit reports of their customers. Credit repair companies dispute with the credit reporting agencies about such negative information on behalf of their clients, seeking their correction or removal from the credit report. The credit reporting company investigates the disputed content to determine its veracity. If deemed inaccurate the credit bureaus must report the incorrect information in accordance with the credit reporting regulations.
Credit repair companies are required to comply with the Credit Repair Organizations Act (CROA). The CROA, enforced by the Federal Trade Commission (FTC), requires credit repair companies to:
• Explain the legal rights of the client and details of the services provided