Credit Repair: How To Help Yourself

You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio, you get fliers in the mail, and may be even calls offering credit repair services. They all make the same claims saying Credit problems? No problem! or We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!
Dont believe these claims, theyre very likely signs of a scam. Indeed, attorneys at the nations consumer protection agency say theyve never seen a legitimate credit repair operation making those claims. The fact is theres no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.
Recognizing a Credit Repair Scam: Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies cant deliver an improved credit report for you using the tactics they promote. Its illegal and no one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, youre left with the same credit report.
If you see a credit repair offer, heres how to tell if the company behind it is up to any good. The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised. The company doesnt tell you your rights and what you can do for yourself for free. The company recommends that you do not contact any of the three major national credit reporting companies directly. The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current. The company suggests that you try to invent a new credit identity - and then, a new credit report - by applying for an Employer Identification Number to use instead of your Social Security Number. The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
If you follow illegal advice and commit fraud, you may find yourself in legal scum. Its a federal crime to lie on a loan or credit application, to misrepresent your Social Security Number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.
Your Rights Regarding Credit Repair: No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair company can do legally, you can do for yourself at little or no cost.
According to the Fair Credit Reporting Act (FCRA) youre entitled to a free report if a company takes adverse action against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address and phone number of the consumer reporting company. Youre also entitled to one free report every year if youre unemployed and plan to look for a job within 60 days; if youre on welfare; or if your report is inaccurate because of fraud, including identity theft.
Each of the nationwide consumer reporting companies Equifax, Experian, and TransUnion is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three companies have a central website, a toll-free telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to.