Credit sweeps. If you’ve searched for credit repair on the Internet, or ways to improve your credit score more generally, you’ve almost certainly come across the term “credit sweep.”
What are credit sweeps? Are they the right option for you? Let’s take a look.
How Credit Sweeps Work
Providers of credit sweeps use a variety of different tactics, but there are some common trends. Typically credit sweeps refer to the practice of disputing all items (or perhaps all negative items) on one’s credit reports, typically by claiming that the accounts were the result of identity theft. That’s why it’s called a credit sweep – credit sweeps are an effort to sweep credit reports of all negative information.
There are several problems with this approach. First, it is illegal.
Claiming that an account was the result of identity theft, when it wasn’t, can result in criminal penalties. This applies both to companies which encourage this practice, as well as individuals who falsify their own identity theft claims. In general, filing false police reports is illegal, and claiming identity theft usually involves filing a police report.
Tradeline Pros, a company in the Las Vegas area, had their clients falsify more than 170 police reports, and claim to be a victim of identity theft. In many of these cases, Tradeline Pros were actually providing fake police reports. A number of employees and executives at Tradeline Pros ended up facing criminal charges.
Unfortunately, this sort of bad behavior is fairly typical of the credit sweep world. In Miami, a credit sweep provider teamed up with corrupt police officers, to file false identity theft reports.
By now, it’s clear that credit sweeps are a very bad idea. However, what should you do instead?
Legal, Ethical Credit Repair
As we’ve discussed elsewhere, credit repair appears mysterious and confusing, but it doesn’t have to be. By law, information on your credit reports must be accurate, verifiable, timely and complete. If an item on your credit reports does not meet those requirements, it must be corrected – or deleted.
Here’s another interesting fact: Credit reports often don’t meet these legal requirements. In fact, these reports contain lots of errors. A study from the Federal Trade Commission found that at least one in four customers had identified mistakes on their credit reports – sometimes very serious ones.
If there’s an error on your credit reports, or simply a negative account which you think might not meet all legal requirements, you have the right to dispute the incorrect information with the credit bureaus. The credit bureaus are legally obligated to investigate the information your disputed, and let you know what they found out.
More specifically, the bureaus are required to forward your dispute to the creditor or debt collector who is reporting innacurate information on your credit reports. These creditors and debt collectors are known as data furnishers, since they provide the credit bureaus with data.
The creditor or debt collector must then investigate the disputed information. They’ll have to decide whether it is being reported properly, or needs to be corrected (or simply deleted).
Typically, credit bureaus have 30 to 45 days to complete this investigation. If a disputed item is not corrected after that, you have several options. First, you might try contacting the data furnisher directly, to try to get the issue resolved.
If that doesn’t work, and the errors on your credit report are harming your credit standing, you could have grounds for a lawsuit, under the Fair Credit Reporting Act. This lawsuit could be filed against the credit bureaus, as well as the data furnisher.
Lawsuits are not your only option. You might also try filing a complaint with the Consumer Financial Protection Bureau, as well as with the Better Business Bureau. You could look into settling the account, and negotiate deletion of your accounts, from your credit reports.
Credit repair is a complex process, and if you don’t take the proper approach from the start, you could damage your case in the long run. If you would rather have professional help, you might consider hiring a credit repair company.
Of course, there are many disreputable credit repair companies, which charge plenty of money, but deliver few results. For this reason, you want to ask the right questions of any credit repair company you’re considering hiring, to make sure that they’re worthy of your time and money.
The Final Word
Credit sweeps, and similar credit repair scams, seem to be all over the Internet. It can be tempting to fall prey to these “quick and easy” fixes – but the consequences can be severe.
Fortunately, you have alternatives. Learn your rights, and review your credit reports. Seek professional help if needed. An improved credit score, and thus a better lifestyle, is just around the corner.
