There is nothing illegal about credit repair. In fact, the Fair Credit Reporting Act (FCRA) spells out legal rights and protocols for disputing items on a credit report.
In addition, the Federal Fair Credit Billing Act (FCBA) allows the right to request broad amounts of information regarding billing and payment history from a creditor (e.g. Chase). The Fair Debt Collection Practice Act (FDCPA) gives people rights and protections against the activities and duties of debt collectors.
Some credit repair companies do some questionable things and make false promises and often mislead consumers. As a result, the Federal Trade Commission (FTC), who is responsible for enforcing consumer protection, developed the Credit Repair Organization Act (CROA).
Let’s take a look at some credit repair methods which are strictly illegal and must be AVOIDED when helping consumers with repairing their credit. Here are a few illegal examples:
- Illegal: Changing a person’s social security number to obtain a clean bill of credit.
- Illegal: Disputing every item on your credit report, regardless of nature. The Fair Credit Reporting Act specifically states that only items that are unverifiable, inaccurate or out of date should be disputed. Items that are clearly reporting 100% accurate, verifiable and in date information should not disputed. Keep in mind, we will learn about several dispute tactics- one to start thinking about now is the “100% accurate” statement, you don’t necessarily have to dispute the accounts existence to have a valid dispute; Maybe the account number, or date of last activity is incorrect? Every item, that reports as part of a trade line is held to the standard that it must be 100% accurate…
- Illegal: Acquiring a Tax Payer Information Number (TIN) from the IRS and using it as a replacement of a person’s social security number.
- Illegal: Taking over someone’s identity that is near the same age and recently died.
Such methods are highly illegal and carry serious consequences. Legal and legitimate credit repair methods are the only way to grow your business.So remember, legal credit repair is done by using Federal laws which give your clients the right to plea “not guilty” to negative information on their credit reports.
P.S. DisputeSuite provides a variety of solutions for your credit repair business. From engaging custom websites, to dispute processing services, to a robust CRM with automations and portals, DisputeSuite is a One-Stop Shop to making your Credit Repair Business A Success!