The developed countries in the West, represented by the United States, have basically formed a credit repair mechanism system based on laws and regulations, with third-party institutions as the main body of implementation and public supervision as a guarantee, and the roles and obligations of stakeholders in the system have been relatively clear.
1. Perfect legal system of personal credit repair mechanism. Personal credit repair mainly involves three laws in the U.S., which provide for the customer’s right to know, the right to repair, and the right to supervise credit repair agencies, respectively. The Fair and Accurate Credit Transactions Act states that “consumers have the right to receive a free annual credit report from a credit reporting agency; the right to receive a credit score calculated by the credit reporting agency, and the credit reporting agency must notify the consumer whenever negative information is added to the credit report.” The Fair Credit Reporting Act states, “Banks and other information providers are required to respond to consumer problems in a timely manner; credit bureaus are required to promptly cancel outdated information, make every effort to ensure the accuracy of the information, disclose the information to consumers once a year free of charge, and provide the information for legitimate reasons.” The Credit Repair Agency Act states, “Credit repair agencies are for-profit professional credit services that help consumers repair their credit records, and fraudulent practices by credit repair agencies shall be restricted.”
2. Specialized credit repair agencies. There are a large number of specialized credit repair agencies in the United States that provide process-oriented, specialized personal credit repair services to their clients. The main work of credit repair agencies is: 1. to guide consumers to submit objection applications to the relevant agencies to correct the wrong information in the customer’s credit report; 2. to propose cautions as well as solutions to customers according to the reality of their bad records, and to guide the credit records to a good state.
The credit repair agency workflow: 1. obtain credit reports provided by major credit bureaus for information subjects, screen and refine the inaccurate information, and submit objections to the credit bureaus in a standardized letter format, urging them to amend and restore the original credit status as soon as possible; 2. initiate explanations to the credit bureaus for the bad records that do exist, and provide additional explanations for their causes in order to win the trust of some credit institutions; 3. 3. assess the severity of the information subject’s own bad record and, for those who are still in default, return the full amount as much as possible or apply for an extension to avoid further deterioration of the credit status. 4. assess your own repayment ability and apply for secured or guaranteed credit products as soon as possible. 5. choose retail institutions or department stores where it is easier to obtain approval, apply for consumer credit cards, purchase products in installments, and repay on time to regain credit. Repay on time to re-accumulate credit. 6. For credit cards that have been historically applied for but never opened for use, open them for use as soon as possible and repay them on time to demonstrate good repayment behavior in your credit report.
4. Crack down on violations. The U.S. Credit Repair Agency Act, among others, prohibits them from making false or misleading statements about a consumer’s credit history and from engaging in any deceptive activity. Institutions that violate the Credit Repair Agency Act will be held civilly liable for damages including any actual damages suffered by the consumer, or an amount equal to the fees charged by the credit repair agency, punitive damages, and attorney’s fees.
