Credit Repair Negotiation

People who are deep in debt often attempt to settle past due accounts by negotiating with creditors. Consumers may attempt negotiations themselves or seek the help of credit negotiators to speak with creditors. Credit negotiation strategies and programs claim to help consumers reduce credit balances and overall debt. Many credit repair negotiation programs are legitimate, but some make promises and do not produce results. Consumers protection laws are in place to support consumers working with debt negotiation companies.

Description

Credit repair negotiation is an alternative to bankruptcy or a means of reducing or eliminating burdensome debts. Negotiations often involve a debt negotiation firm contacting creditors to arrange for unsecured debts such as personal loans, lines of credit and credit card debt to be paid off for a percentage of the balance owed.

Advantages

If credit repair negotiations are successful, you can save hundreds or even thousands of dollars in payments, interest and fees. Many creditors are willing to negotiate a settlement and accept less than what is owed on a delinquent account. They figure receiving some payment is better than none at all. This is to the advantage of consumers who want to settle past due accounts but do not have the funds to pay all of what is owed. Successful negotiations help consumers settle and close delinquent accounts for pennies on the dollar in some cases.

Drawbacks

If credit repair negotiations are unsuccessful, you will most likely be out of hundreds or thousands of dollars spent on debt negotiation programs. Many credit repair negotiation programs make illegal claims to remove adverse accounts such as bankruptcies, charge-offs and judgments. The truth is, accurate negative information on your credit report cannot be removed. Only time can improve your credit. In most cases, negative information remains on your credit report for at least seven years. Bankruptcies and foreclosures can remain on your report for 10 years or more. Even if you are able to successfully negotiate credit accounts, chances are the account will still appear negative on your report.

Consumer Rights

Many of the strategies employed by credit repair agencies consumers can do themselves. You are entitled to a free credit report from each of the major credit bureaus every twelve months. The three major credit bureaus are Experian, Equifax and Transunion. You have the right to request an investigation of any item on your credit report you feel contains inaccurate, incomplete or outdated information. If the credit reporting agency cannot verify the information you request within 30 days, it must remove the item from your report. Credit reporting agencies can only report accurate information about you. If you have been denied credit, insurance or employment because of information contained in your report, you have the right to request a copy of your report within 60 days from the credit reporting agency.