If you’re working on improving your credit, there’s a lot of advice online. Some of those suggestions are excellent – and many are not. 

As an attorney-led credit repair firm, we interact with many folks who have attempted to repair their credit in the past – and didn’t succeed. From these interactions, and our own experiences, we’ve learned quite a bit about what does not work, when it comes to cleaning up your credit. Below, we’ve shared 5 things you should NOT do, if you’re hoping to get your credit report in order.

1. Disputing Negative Accounts Online

Information on your credit reports must meet a series of legal requirements, as set forward in the Fair Credit Reporting Act (known as the FCRA). The FCRA is the federal law which governs information that appears on your credit reports. 

The FCRA, amongst other provisions, requires that information which appears on one’s credit reports be accurate, verifiable, complete and timely. If you believe that these requirements might not have been met, you have the right to dispute the negative credit information.

When you dispute information on your credit reports, the credit reporting agencies (in most cases, Experian, Equifax and TransUnion) must forward the dispute to the company which reported the disputed information (typically, a debt collector, credit card company, mortgage lender or auto lender). These companies are known as data furnishers.

The data furnisher must investigate the disputed information, and inform the credit reporting agencies of whether this information is in fact accurate. If it is not accurate, the information must be corrected or deleted. This process must be completed within 30 days.

You can dispute information with credit reporting agencies, through the use of several different methods. One approach is to submit a dispute via certified mail, sent out by the post office. 

You can also use software like Certified Mail Labels, to send off the letters for you. 

Another approach is to submit disputes online. Websites like Credit Karma, as well as those provided by the credit reporting agencies, make it possible to dispute information online. We strongly suggest avoiding that. 

First, online disputing is designed for the convenience of the credit reporting agencies. It was not created to help you meaningfully dispute errors which appear on your credit reports.

Thus, the options for disputing information are rather limited. You are asked to select from a few narrow options (as to the reason for the dispute), and not allowed to elaborate on your dispute. You often cannot attach supporting documentation.

All of this harms the effectiveness of your disputes, and only makes things easier for the credit reporting agencies. Thus, online disputing clearly doesn’t make sense.

The good news is, you have another option: Dispute by certified mail. Clearly state why you believe information on your credit reports is innacurate, and explain the errors in detail. Attach any supporting documentation. Don’t engage in ineffective disputing online.

2. Purchasing Authorized User Tradelines

If you’re looking to repair your credit, one part of your efforts must focus on addressing innacurate negative information, which was reported in the past. The other part must center around building positive new credit history.

If you’ve searched online for strategies to build credit, you’ve probably come across tradelines. How do tradelines work? Basically, you pay a fee to someone who has good credit cards, i.e. cards with strong payment history and high limits. That person adds you to the card, which should then appear on your credit reports (and thus boost your FICO score, with FICO being the most widely used form of credit scores).

Here’s why tradelines don’t make sense. First, you might be able to accomplish the same thing which tradelines offer, free of charge. Just ask a friend or family member who has good credit, to add you to one of their credit cards. Why pay someone to do this for you? 

Second, purchasing tradelines are of questionable legality. Why get involved in something which might get you in legal trouble?

Lastly, tradelines often don’t work. Some FICO scoring models are designed to disregard tradelines, in cases where the account holder is not a relative. Essentially, this means that if you buy tradelines, they might not count towards your credit score.

Another risk is that you buy a tradeline, and the cardholder loses access to the card. In some instances, credit card issuers become very suspicious, when they see multiple people being added to an authorized user tradeline. 

As a result, they decide to close the card. You’ve wasted your money, since you paid to build credit through a card, which you no longer have access to.

3. Filing False Identity Theft Reports i.e. Credit Sweeps

A credit sweep is another illegal tactic, which is used by more than a few credit repair “professionals.” With a credit sweep, you’re typically filing a false claim of identity theft. Essentially, you’re claiming that the negative accounts on your credit reports don’t in fact belong to you.

To file a claim of identity theft, you normally have to fill out a police report, and submit a sworn statement, stating that you were a victim of identity theft. This is not only unethical, but can also lead to legal consequences. 

In just the past few years, a credit repair company in Las Vegas, as well as a credit repair provider in Florida (who paired up with a few crooked police officers), were each indicted for arranging credit sweeps. Of course, individuals who hired these companies might also be exposing themselves to legal consequences.

There are several issues with this whole approach. First, it is grossly unethical. Lying about accounts which you voluntarily opened, is definitely not the sort of behavior you can be proud of. You can do better than that.

Second, you could get yourself in serious legal trouble. Making false statements to the police is a crime in most states. In the name of improving your credit, there is no reason to expose yourself to legal liability.

4. Asking Credit Reporting Agencies To Remove Paid Collections Accounts

Collection accounts are quite damaging to your credit score. A single collection account can reduce an otherwise strong credit score by 80 to 100 points. Collections accounts typically result from unpaid, past due utility, telecommunications, credit card, insurance, and medical debts. 

In some cases, debt collectors are hired by the original creditor (whoever the original debt was owed to). If the debt collector is able to get the consumer (you) to pay, then they’ll be paid a commission by the original creditor.

In other cases, debt collectors actually purchase debts from the original creditor. These types of debt collectors are known as debt buyers. Debt buyers often file lawsuits on debts they purchase.

When you pay a collection, the account usually remains on your credit reports. Some debt collectors / debt buyers might remove the account upon payment, but most don’t. 

It is perfectly legal for a paid collection to be marked as paid, and remain on your credit reports. Unless the account is somehow reported inaccurately, debt collectors and credit reporting agencies are under no obligation to remove a paid collection account. 

The impact on your credit score varies. Some newer versions of FICO (such as FICO 9), don’t count paid collections. However, older versions of FICO often continue to count paid collections towards your FICO score.

Some consumers call the credit reporting agencies when they have paid a collection, and ask for the account to be removed. As stated earlier, there is no obligation on the part of credit reporting agencies to remove such accounts – and they rarely agree to.

You’re better off trying to negotiate a deletion with the debt collector, or finding inaccuracies on which to challenge the debt. Calling a credit reporting agency to request deletion of a paid debt is usually not effective. 

5. Sending “Section 609” Dispute Letters

If you’ve done any research online, you’ve probably come across credit dispute letters which cite Section 609 of the Fair Credit Reporting Act. These letters typically cite the (supposed) obligation of a creditor or debt collector to provide a signed contract, stating that you (the consumer) are obligated on the debt. Many advocates of these letters will ask for a physically signed copy of a contract (as opposed to a digital signature).   

As the theory goes, failure to provide this agreement means that a creditor (or a debt buyer / collector) they hired must provide you with a contract, which contains your physical signature. Failure to provide this documentation means that a debt must be removed from your credit reports.

This theory of Section 609 isn’t entirely untrue. For a debt to appear on your credit reports, you must in fact be responsible for payment of the debt. If someone opened a debt in your name without your permission, you cannot be held responsible for paying it. 

Additionally, the most common way to become obligated to pay a debt, is to sign a contract with the original creditor (such as a credit card issuer, utility company, or medical office). If such a contract were never signed, then you may not be responsible for the debt.

However, such a signature need not be physical. Most credit cards we open these days make use of a digital signature – you rarely apply in person. The same is true with utilities and doctor’s offices. 

Second, there is no requirement that you sign a contract with a debt collector, in order for them to be able to collect on a debt. It’s true that a debt collector must have proof you owe a debt – but a contract with the collector itself is not part of the requirements.

Too many consumers send 609 letters to credit bureaus and creditors, and get little to no results. In fact, many of their disputes are marked frivolous, which makes it difficult to succesfully dispute the items again.

Credit Repair That Actually Works

We’ve talked a lot about what does not work, when it comes to credit repair. So, what does work? How can you effectively address negative items on your credit reports? 

First, consider speaking to an attorney who specializes in FCRA issues, as well as those which involve the Fair Debt Collection Practices Act (FDCPA). It is quite possible that some of the items on your credit reports don’t meet legal requirements, and you might thus have grounds to sue. 

If you don’t have grounds to sue, you might want to consider hiring a reputable credit repair company. While there are many credit repair scams out there, there are at least some companies which actually work. These companies won’t use the sorts of tactics discussed above. Be sure to ask the right questions before hiring a credit repair company.  

What about fixing your credit on your own? There are resources out there, to help you repair your credit by yourself. Yet, credit repair can be complex, and so working with a professional might make sense.