Introduction to Credit Repair Laws

Laws and Credit Repair

The most powerful credit repair methods are based on our civil rights. Now, you might wonder what the heck do “civil rights” have to do with credit repair? Most people think “civil rights” exist to protect people’s freedoms and equality, but those aren’t the only civil rights we have. In reality,  many laws exist to protect our civil rights. Several laws protect people from the credit bureaus, creditors, and collection agencies. These laws will be used when challenging credit report items. What you are essentially doing is making sure your client’s civil rights are protected. 

Many people think sending a dispute letter to the credit bureaus is where credit repair begins and ends. It is true that the Fair Credit Reporting Act (FCRA) provides consumers with the right to challenge any credit report item deemed to be questionable. It also requires that the credit bureau delete any credit listing that is inaccurate or cannot be verified.  However, credit repair does not end with the credit bureaus or the infamous FCRA. There are hosts of other tactics and laws you can utilize, some which don’t even involve the credit bureaus. Learning the laws will give you a huge advantage over your competitors. 

There are several federal laws that exist to protect consumers in credit-related issues. Some of these laws include:

• The Fair Credit Reporting Act (FCRA), which basically tells the credit bureaus what they can and can't do. All credit bureau disputes utilize the FCRA. 
  
  
• The Fair Credit Billing Act (FCBA), which is a subset of the more comprehensive Truth in Lending Act, which essentially tells original creditors how they should behave. This law is very effective for disputing directly with the creditor.
• The Fair Debt Collections Practices Act (FDCPA), which regulates debt collectors. It forms the basis for the intervention called “debt validation.”

We have included general explanations of all the above laws and more in this section. If you are like most people, including myself, when you read the laws the majority of what you read won’t make a whole lot of sense. The sentences are worded in a confusing way and use funny terminology. Don’t worry, it will slowly start to make sense.   

You want to devote yourself to reading the heck out of the laws. The more time you spend reading the, the more the material will sink in.  You can also use the internet as a supplement. Visit Google and type “Fair Credit Reporting Act,” there are tons of sites dedicated to explaining the laws in laymen’s terms. The key is to study, study, and study some more until you have a solid understanding. 

Why learn all the credit repair laws?
If you are like most people the whole concept of learning law is uninteresting and maybe even dreadful. In fact, I often have people approach me and say things like, “I can just find and download the credit repair letters I need off the internet or use the ones in this course.” While this is true, what happens when 20,000 people use the same letter? It gets flagged by the credit bureaus. Instead, if you want to be a successful credit repair business, it is worth putting the effort in to learn the various credit repair laws so you can create your own disputes and letters. Think of the laws as the foundations of the credit repair letter. 

Before we delve into the laws, let’s take a look at a pretend example so you can see how we use laws in credit repair. Let’s say there is a make-believe law called the Fair Credit Pizza Delivery Act (FCPDA) that requires the credit bureaus to: 
1. Send you a free pepperoni pizza every time you order a credit report. 
2. Make the pizza with Italian dough only imported from Italy.  
3. Deliver the pizza in 30 minutes or less. 

Now the credit bureaus must follow this entire law. They can’t pick and choose which parts they want to comply with. If they don’t comply with the entire law, there are serious penalties for their noncompliance. So how would you create a good intervention letter using the above law without lying or misleading?  One method is to request documentation that proves they complied with the FCPDA. Here is a sample letter:

Quote

Dear TransUnion, 

I have recently ordered my credit report and pursuant to the Fair Credit Pizza Delivery Act, you are required to send me a free pizza made of Italian pizza dough. Please demonstrate that you delivered the pizza to me.  

Also, please show that you delivered the pizza within the requisite 30 minute time frame. 
If you are unable to provide documentation, please re-deliver the pizza at once.  

Sincerely, 

John Doe

This is a silly example, but the point is you are essentially requesting that they document their compliance with the law. You can apply the same approach to create your own credit repair letters. Whether you are referencing the FCRA, FCBA, or the FDCPA, you will ask the other party to prove they complied and didn’t break the law. When you create dispute letters like this you aren’t lying, you are just asking for information about how they reported the account to the credit bureaus. 

Laws and Credit Repair
The reason this works is because companies do not want to take the time to answer your lawful request. Often the documentation is scattered and expensive to gather, so they often just delete the account rather than go through the hassle of arguing. 

This tactic can be used for multiple disputes:  

Credit bureaus: “Hey credit bureau, show me you have complied with the FCRA” 

Creditors: “Hey Creditor, provide me this list of information pursuant the FCBA”  

Debt collectors: “Hey collector, show me the complete history and origin of the alleged debt in accordance of the FDCPA”. 

Take the time to learn the laws so you can create your own credit repair letters tailored to your clients’ needs. Now let’s take a look at each law a bit more closely.