From Consumer Wiki
In general, a person’s credit report contains accurate information. Some information expires after a specified amount of time. Negative data can stay in a person’s credit history for up to seven years. Information about bankruptcies remains for ten years. A credit repair company cannot remove these records or establish a new credit identity for an individual.
Consumers should follow procedures established by credit reporting companies and may desire to hire an attorney, or do it themselves when attempting to change credit records. A credit repair service (or consumers themselves) can research records for errors in billing or credit reporting to clear or delete incorrect information and repair credit in that manner but neither can remove negative data from the file if it is accurate.
The California Department of Consumer Affairs’ Legal Office has prepared Legal Guide CR-9 for consumer information. (The following is a summary of pertinent points about credit repair services. Consumer may request a copy of this legal guide for complete definitions and explanations for credit repair services).
Statutory Coverage (C 1789.12, 1789.16)
Credit services organizations (also known as “CSOs” or “credit repair services”) do not provide credit. CSOs offer to obtain loans or extensions of credit for consumers who have experienced credit problems or who want to correct or improve their credit record. The buyer of a CSO’s services can cancel the contract, without penalty or obligation, within five days after signing it.
Statutory Purpose and Construction (CC 1789.11(b),(c)
While most credit services organizations provide consumers legitimate services, some have been known to accept payment and not provide any service, to provide inaccurate or misleading advice (e.g. referring consumers to potential creditors who would have granted them credit in any event), and to engage in questionable credit repair practices (e.g. disputing every entry on a consumer’s credit report).
2. Obtain a $100,000 surety bond from an admitted surety in favor of the State of California for the benefit of any person damaged by any violation of the Act (CC 1789.18) (The bond must be maintained for two years after the CSO stops doing business in California.)
Prohibited Practices (CC 1789.13, 1789.17, 1789.19(a).)
1. Charge or receive any consideration solely for referring a buyer to a retailer seller or other credit grantor for an extension of credit, if the credit is, or will be, on substantially the same terms as those available to the general public, or on substantially the same terms as the buyer could have obtained with the CSO’s assistance.
2. Make, or advise the buyer to make, any untrue or misleading statement to a consumer credit reporting agency, or to any present or potential creditor, such as untrue statements about the buyer’s identification, home address, credit worthiness, credit standing, or credit capacity.
2. Notice of the buyer’s right to proceed against the CSO’s bond and the name and address of the surety company which issued the bond.
Lenders examine credit reports to determine if an applicant is a good risk but also to note how well he or she has met his or her financial obligations. When a person or business inquires about your credit, this will be noted in your file. In reviewing a file, a consumer should look for what has been reported as well as what has not. You may send each of the three major credit agencies a copy of a recent account statement and copies of your canceled checks or receipts showing your payment history and ask that the information be added to your file. You can build a positive image this way.
Credit repair service must register with Attorney General’s office. Credit repair services must have a surety bond on file with the California Secretary of State’s office. County or city business license is required for a business.
(800) 952-5225 (CA Callers)
(916) 322-3360 (Out of State)
(916) 323-5341 Fax
(800) 952-5548 (TDD in CA)