Credit Repair Companies

Every day consumers with poor credit are promised, for a fee, that their credit history can be 'fixed' or cleaned up.  These promises of credit repair are advertised on TV, on the Internet, and on the radio.  You may even receive phone calls from telemarketers or receive letters in the mail from companies that claim they can erase or remove bad credit or tell you how to create a new identity.  These companies are known as credit repair companies and they cannot deliver.  Don't believe these claims.  Save yourself some money; no one can remove negative information that is accurate.  Only time, a conscious effort, and a debt repayment plan will improve your credit.

Credit Repair companies may encourage you to violate federal law.  You will be committing fraud and may be subject to prosecution if you . . .

  • make false statements on loan applications

  • misrepresent your Social Security number

  • get an Employer Identification Number (EIN) from the IRS under false pretenses

Beware of companies that . . .

  • want you to pay for services up front

  • do not tell you your legal rights and what you can do yourself for free

  • recommend you do not contact the credit bureaus directly

  • suggest that you try to invent a 'new' credit report

  • advise you to dispute all information in your credit report

By law (Credit Repair Organizations Act), credit repair companies cannot require you to pay until they have completed the promised services, and the credit repair company must:

  • give you a copy of the 'Consumer Credit File Rights Under State and Federal Law' before you sign a contract

  • give you a written contract that spells out your rights and obligations such as payment terms, description of the service and how long it will take to achieve results. (Carefully read this contract before signing.)

Before you do business with a credit repair company, check it out with your local consumer protection agency and the Better Business Bureau in the company's location.  If you have had a problem with a credit repair company, report it to your local state attorney general and the Federal Trade Commission (1-877-FTC-HELP).

REMEMBER, CREDIT REPAIR IS
A DO-IT-YOURSELF JOB



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