The goal of a credit sweep is to cause the credit bureaus to remove negative information from your credit reports prior to the time that they are legally required to do so. This particular scam that disreputable credit repair companies often engage in is called the credit sweep. Scammers have abused this section of the FCRA by selling a service that takes advantage of these policies even when identity theft is not the cause of negative information appearing on someone’s credit report. They have to block the information from ever appearing on your credit reports again.This is a very short period of time in comparison to the 30-45 days that are typically allowed for the credit bureaus to complete their investigations and remove the information. They have to remove the fraudulent information from your credit report within four business days of receiving all of the valid documentation that proves identity theft has occurred. In addition, in the event of identity theft, Section 605B obligates the CRAs to do two things that are not normally required as a part of removing negative information: This section of the FCRA states that if you have been the victim of identity theft and someone else has fraudulently opened accounts in your name, then you have the right to have the fraudulent information resulting from identity theft removed from your credit reports. Section 605B of the FCRA is a section that is entitled “Block of Information Resulting From Identity Theft.” They then look into your claim and determine if the dispute is valid or if the challenged information can be verified as correct. If you do challenge an item on your credit report, the credit bureaus are required to perform an investigation. The Fair Credit Reporting Act (FCRA) gives you the right to dispute information on your credit reports that you believe to be incorrect. Disputes Under the Fair Credit Reporting Act This process is not illegal it is commonly used and has been around for decades. Typically, the credit repair process involves sending letters on behalf of consumers to challenge the validity of the data in question and ask the CRAs to validate the items. Hiring a Credit Repair Company to Fix Your CreditĪlthough the credit dispute process is free, credit sweeps are sold to consumers by credit repair companies, who charge a fee to try to get negative information removed from the consumer’s credit reports.Īlthough trustworthy credit repair professionals do exist, there are also plenty of “scumbags,” in John’s words, in the industry who take advantage of consumers and use illegal and fraudulent practices to make money.įor this reason, it’s extremely important to do your due diligence before deciding to work with a credit repair company. Alternatively, credit report information may be challenged through the financial institution that is furnishing the data to the CRAs.Ĭredit repair is legal as long as it complies with federal and state rules and laws that govern the industry of credit repair. This is done by disputing the negative items with the credit reporting agencies (CRAs, AKA credit bureaus). Credit repair -the legal kind at least-is simply the process of removing inaccurate or unverifiable information from a consumer’s credit report. To be clear, credit repair as a whole is not illegal. Tradelines can in some cases cause credit scores to go down. Tradeline Supply Company, LLC does not sell tradelines to increase credit scores and does not guarantee any score improvements. John Ulzheimer, one of the nation’s most prominent credit experts, explains why you need to watch out for credit sweep scams in an episode of Credit Countdown.ĭisclaimer: The views and opinions expressed in this article are strictly those of John Ulzheimer and do not necessarily reflect the official stance or position of Tradeline Supply Company, LLC. Unfortunately for many unsuspecting consumers looking to improve their credit, the credit sweep is a fraudulent and illegal practice. Credit sweeps are a heavily advertised and promoted service among credit repair companies.
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