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What is Credit Repair?
Home » Investing » Credit Repair » What is Credit Repair?Credit repair is a general term often related to the practice of improving or reconstructing a person’s financial reputation among creditors. In the long run, only one thing will improve a credit rating damaged by poor credit habits and that is to change those habits.
Making arrangements with the creditors to repay them is often one of the steps in improving credit habits. Creditors may accept slow payment schedules, as an alternative to writing off the debt. In some cases, creditors may accept a less-than-full repayment. The key here is contact with the creditor and taking action to retire the debt.
At the same time, reviving an old debt that is no longer collectible can actually do additional damage to one's credit reputation. It is best to be aware of the circumstances regarding the debt's collectability, statute of limitations, and legal and illegal collection practices, before contacting a creditor on a very old debt.
In December 2003, Congress passed the Fair and Accurate Credit Transactions Act (FACT Act), which included the right to a free annual credit report on request and a number of provisions designed to improve the accuracy of credit reports.
On June 4, the Federal Trade Commission finalized its rule for implementing the new consumer right to a free credit report, rolling it out over a nine-month period, beginning on the west coast in December 2004 and finishing on the east coast in September 2005.
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