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Credit Bureaus * Credit Repair
Credit Reports

Credit Repair & New Credit Files

If you're like most people, you've seen ads in your local newspaper or on the Internet promoting credit repair as a way to resolve your credit problems. Credit repair is essentially removing negative information from your credit report regardless of accuracy by taking advantage of provisions in the Fair Credit Reporting Act. Some ads even promote starting a new credit file from scratch with "little known secrets" the credit bureaus don't want you to know about. 

Credit repair involves challenging negative information in your credit report whether it belongs there or not. By law the credit bureaus have 30 days to verify the information in question with the company that reported it. If they are unable to do so, the item must be removed... even if it is accurate. The older the information, the more likely the original records will not be available to confirm it.  This is one of the so called secrets credit repair companies use to remove valid negative items in your credit file.

Getting a "fresh start" or establishing a new credit report is another method used by promoters to establish new or clean credit files. The key to this method  is using a TIN number (tax identification number) issued by the IRS. TIN numbers are normally issued to businesses for tax purposes. This number is used in place of your social security number to obtain credit.  Once credit has been granted under this new number a new credit file will be created with no reference to the old you. 

Before embarking on a journey to a "New Credit You",  you should keep in mind that there is nothing credit repair  companies can do that you can't do for yourself. Additionally, some of the techniques used by the companies promoting new credit files involve legally questionable tactics that one should steer clear of.

Credit Reporting Facts

• Accurate information cannot be removed.

• New credit files (file segregation) cannot be legally established.

• Bankruptcy information can be reported for up to 10 years.

• Information about a lawsuit or judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.

• Information reported because of an application for a job with a salary of more than $75,000 has no time limit.

• Information reported because of an application for more than $150,000 worth of credit or life insurance has no time limit.