The Truth about Bad Credit
If you are faced with bad credit, it is important for you to know some basic facts about your situation. The only way that you will be able to take control of your situation and begin the slow climb back to better credit is to arm yourself with information. Here are a few important things for you to know.
You are entitled to one free credit report each year from each of the major credit reporting agencies. These agencies are Equifax, Experian, and TransUnion. You can also request a free report if any company takes adverse action against you, such as denying your application for credit, insurance, or employment as long as you request your report within 60 days of receiving notice of the negative action. This notice will give you the name, address, and phone number of the consumer reporting company. You’re also entitled to a free report if you’re unemployed and plan to look for a job within 60 days, are on welfare, or if your report is inaccurate because of fraud including identity theft. To order one of these free reports, you can simply go to annualcreditreport.com or call 1-877-322-8228.
You can dispute any mistakes or outdated items on your credit report for free. The law states that the consumer reporting company and the information provider are both responsible for correcting any inaccurate or incomplete information in your credit report. You simply need to contact the consumer reporting company and the information provider.
You also need to realize that any accurate and timely negative information can not legally be removed from your credit report. You can ask for an investigation of any information in your file that you dispute as inaccurate or incomplete, but if the negative information in your report is accurate, only the passage of time can lead to its removal. A consumer reporting company can report most accurate negative information for seven years and any bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. There is no time limit on reporting information about criminal convictions, information reported in response to any application for a job that pays more than $75,000 a year, and any information reported because you applied for more than $150,000 of credit or life insurance.
By law, any credit repair organization that you contact for counseling must give you a copy of the Consumer Credit File Rights Under State and Federal Law before you sign any contract with them. They are also required to give you a written contract stating your rights and obligations. This contract must specify the payment terms, the total cost, a detailed description of the services to be performed, how long it will take to achieve results, and any guarantees they offer, along with the company’s name and business address. Make certain that you read both of these documents carefully and completely before you sign anything.
A credit repair company is not allowed to make false claims about their services. They are also not allowed to charge you until they have completed the promised services. They should perform any of these services until they have your signature on a written contract and have completed a three-day waiting period. During this waiting period, you may cancel the contract without paying any fees. The law has specific protections for you, but you must be aware of them in order to make sure that you are not taken advantage of by an unscrupulous organization.