What is a Credit Sweep & Why It Is Illegal

A credit sweep is a term you might run into within the credit repair industry, often claimed to be a shortcut to a 700+ credit score. 

The reality, however, is that these sweeps are not only risky, but actually illegal, and are targeted by the FTC and Department of Justice.

How a Credit Sweep Works

In theory, a credit sweep is a strategy that consumers or credit repair agencies use to remove all negative items from a credit report simultaneously.

The traditional credit repair process is the opposite of this approach, being a methodical and line-by-line dispute that is completely legal and the only valid option to go for.

Credit sweeps want to bypass this process and expedite it by exploiting specific consumer protection loopholes by forcing the credit bureaus to sweep the report clean.

Why Credit Sweeps Are Illegal

While challenging inaccurate information is completely legal under the Fair Credit Reporting Act (FCRA), and can help you out to improve your credit score, especially as a quarter of all reports feature at least a single error in them.

Services that sweep credit reports, however, often cross into criminal territory, due to following reasons:

Identity Theft Fraud (The "605B" Scam)

The most common illegal tactic used by these services involves filing a falce FTC Identity Theft Report, looking to exploit a loophole within section 605B of the FCRA, which requires credit bureaus to block fraudulent information within four business days of receiving a valid report of identity theft, as well as a police report.

If you do this to claim that your legitimate debts are results of identity theft, you are falsifying a government document and are committing perjury and mail fraud, which carries both heavy fines and potential jail time.

File Segregation (CPNs and EINs)

Another common thing you can run into with credit sweep services is a promise of a fresh start of your credit profile, by creating a new file using a Credit Privacy Number (CPN) or a stolen Employer Identification Number (EIN).

The reality, however, is that you cannot ever create a new legal credit identity for yourself, and using a CPR to apply for credit constitutes Social Security fraud.

Violation of the CROA (Credit Repair Organizations Act)

Credit sweeps are strictly banned under CROA, making it illegal for credit repair services to lie to credit bureaus, advise clients to make false statements, or change identities to hide credit history.

These services are also prohibited to promise you that they’ll remove accurate information from your report, as well as to charge you upfront fees.

Why Illegal Sweeps Fail

While some people see initial success by using a credit sweep, this is rarely a permanent fix, and leads to something often called the Boomerang Effect.

A credit bureau might remove an item from your report due to your fraud claim, but if the original creditor provides proof, such as your IP address, payment history or a contract you signed, the bureau will reinsert the item. 

This once again tanks your credit score, but also flags you for fraudulent and frivolous activity, making it practically impossible to dispute any actually legitimate errors in your report in the future.

How to Dispute Errors In Your Credit Report Legally

The Fair Credit Reporting Act (FCRA) gives you the right to a 100% accurate report. If a bureau or creditor can’t prove a piece of data is correct, they are legally required to delete it. 

Here is the authoritative way to exercise those rights.

Identify and Document Any Errors

A forensic audit is essentially a legal credit sweep. Instead of claiming identity theft for accounts you actually opened, you use a fine-tooth comb to find technical reporting errors.

Under the Fair Credit Reporting Act (FCRA), every detail on your report must be accurate. If a collection agency lists the wrong balance, an incorrect Date of First Delinquency or even a misspelled address, the entry is legally inaccurate.

If they cannot verify the exact data point you challenge within 30 days, the law requires them to delete the entire account.

Debt Validation

If your debt has been sold to a third-party collector, there is a real chance that the collection agency does not have the proper paperwork to back it up, so you can send a Debt Validation Letter within 30 days of a collector contacting you, as you are legally allowed to under Section 809 of the Fair Debt Collection Practices Act (FDCPA).

Pay-for-Delete Agreement

Even if you pay off your debt to a collector, you will not remove the stain from your credit report, as it just changes the status to Paid Collection.

You can avoid this by offering to pay off a portion of your debt in exchange for a complete deletion of the tradeline. Just make sure that you have a signed Pay-for-Delete agreement on the letterhead first, in order to prevent the Boomerang Effect.

The Method of Verification (MOV) Demand

If a bureau verifies a dispute but doesn't fix the error, you still have the right to send a follow-up letter demanding the Method of Verification.

This can help you remove an item from your report in case that a credit bureau cannot provide you the name of the person they spoke to at your bank, or specific documents they used to verify data.

Because credit bureaus increasingly use automated e-OSCAR systems, they often can’t provide these manual details, and if they cannot provide the MOC, the item must be removed from your report.

Strategic Credit Building

While removing bad marks from your credit report is certainly helpful, it is only half the battle, as you also need to add new, positive data to it.

For example, you can get help from a family member with a high credit score to add you as an authorized user, because if they have impeccable credit history, it will automatically reflect on your score as well.

You can also connect your bank account to Experian and use its Experian Boost service in order to get credit for utility and streaming service payments that aren’t usually added to your credit report, which can actually make a positive impact in the long run.

Final Words

As you can see, using credit sweeps is not as simple as exploiting a few loopholes in the system. In fact, it is highly illegal and can result in serious consequences and permanent damage to your credit. 

Always make sure to stay true to the time-tested methodical approach to credit restoration, which is all about transparency and technicality, and while it can take time, the effort is usually worth it.