There are many credit repair companies out there that say they can repair your credit extremely quickly, however more often than not these are scams. Realistically, there is only so much you can do to legitimately repair your credit and while there are ways of doing these things faster, it will take time. Those companies that claim they can repair your credit instantly or within a few months are basing this claim on one of two strategies. The first of these is creating a new identity and the second of these involves abusing the dispute process and neither of these are good ideas.
With respect to creating a new identity, the most common way of doing this is telling clients to get an Employer Identification Number (EIN) from the IRS and then use this as an alternative to the Social Security Number which is tied to the person with bad credit. Technically this method can work for a while, but EINs are distinctive, so chances are very good that eventually you will be caught. For the record, this is patently illegal and if you do this, it is you – not the credit repair company – that will be held responsible and may be facing prison time. In an information based economy, identity fraud is taken very seriously because it undermines the entire system, so when you get caught you can expect little mercy from the police or the courts.
The second method used to work quite well before information technology was fully implemented into the record keeping process of most creditors, but mostly does not work today. A person has a right to dispute any item on their credit report and once the dispute is recognized, the credit reporting agency has thirty day to investigate the matter and determine whether or not the debt is valid. If the original creditor cannot prove the validity of the debt or fails to do so within the prescribed thirty days, the item is removed from the credit report. The credit repair companies would take advantage of this by disputing everything, valid or otherwise, and usually over and over again frequently resulting in many items being removed from the credit report.
However, this tactic became too popular and the industry can now handle the matter fairly easily. First, the credit reporting agency does not have to accept all the disputes at the same time, instead it can ask for more information, extending the time deadline. Secondly, most of the creditors or collection agencies have all the validation information in digital form today, meaning that validating a debt just involves printing off some documents, so it is very quick and easy. Further, even if an item is removed, it may only be temporary. Most major creditors now automatically resubmit negative credit information every month or quarter, meaning that the only way to get the item fully removed is by dealing with the creditor.
Basically, valid negative entries remain on your credit report for the full seven years unless you file for bankruptcy, so be wary of promises claiming they can teach you how to fix your credit fast. Credit report repair takes time! The good news is that with time and some work you CAN fix bad credit!
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