No one can legally remove accurate and timely negative information from a credit report. You can ask for an investigation—at no charge to you—of information in your file that you dispute as inaccurate or incomplete. Some people hire a company to investigate for them, but anything a credit repair company can do legally, you can do for yourself at little or no cost.
By law:
• You’re entitled to a free credit report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice includes the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
• Each of the nationwide credit reporting companies—Equifax, Experian, and TransUnion—is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. To order, visit annualcreditreport.com, or call 1-877-322-8228. You may order reports from each of the three credit reporting companies at the same time, or you can stagger your requests throughout the year.
• It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Both the credit reporting company and the information provider (the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights, contact both the credit reporting company and the information provider.
The Credit Repair Organization Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you, and to charge you before they've performed their services. The CROA is enforced by the Federal Trade Commission and requires credit repair companies to explain:
• your legal rights in a written contract that also details the services they'll perform
• your three day right to cancel without any charge
• how long it will take to get results
• the total cost you will pay
• any guarantees
What if a credit repair company you hired doesn't live up to its promises? You have some options. You can:
• sue them in federal court for your actual losses or for what you paid them, whichever is more
• seek punitive damages—money to punish the company for violating the law
• join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorney's fees
In New York, as in all states, it is not possible to legally remove accurate and timely negative information from a credit report. Consumers have the right to request a free credit report under certain circumstances, such as after an adverse action is taken against them based on their credit report, if they are unemployed and seeking employment, on welfare, or if their report is inaccurate due to fraud. Additionally, everyone is entitled to one free credit report every 12 months from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) by requesting it through annualcreditreport.com or by phone. Disputing errors on a credit report is free, and both the credit reporting agency and the information provider are obligated to correct any inaccuracies. The Credit Repair Organization Act (CROA) governs credit repair companies, prohibiting them from misleading consumers about their services and charging upfront fees. These companies must provide a written contract detailing the services, a three-day right to cancel, the timeline for results, total costs, and any guarantees. If a credit repair company fails to fulfill its promises, consumers can take legal action, including suing for actual losses or paid fees, seeking punitive damages, or joining a class action lawsuit. Successful lawsuits against such companies may result in the company paying the consumer's attorney's fees.
