Your Essential Guide to Credit Repair Laws

Credit Repair Organizations Act (CROA) No Upfront Fees: Credit repair companies cannot charge you before performing services. Written Contracts: They must provide a clear contract outlining their services and total cost. Cancellation Rights: You can cancel within three days of signing, without penalty. Prohibited Misrepresentation: They cannot guarantee specific credit score improvements or advise illegal tactics like falsifying information. Fair Credit Reporting Act (FCRA) Dispute Rights: You can dispute any inaccurate item on your credit report. Credit bureaus must investigate and correct mistakes. Free Annual Reports: You’re entitled to a free credit report from each major bureau once every 12 months. Time Limits on Negative Data: Most negative entries must be removed after seven years (10 years for bankruptcies). State Laws Some states impose stricter requirements or special licensing for credit repair firms. Verify that any company you’re considering is licensed in your state. Warning Signs of Scams Avoid credit repair outfits demanding upfront payment, guaranteeing unrealistic results, or urging dishonest practices. Key Takeaway Familiarize yourself with CROA and FCRA to protect your credit rights. Be wary of quick-fix promises, and remember you can often dispute errors on your own for free.