You see the ads in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services.
They all make the same claims: "Credit problems? No problem!" "We can erase your bad credit-100% guaranteed." "Create a new credit identity-legally." "We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!" Do yourself a favor and save some money, too. Don't believe these statements. They're just not true.
Only time, a conscientious effort, and a plan for repaying your debt will improve your credit report. The Warning Signs If you should decide to respond to an offer to repair your credit, think twice. Don't do business with any company that: * wants you to pay for credit repair services before any services are provided * does not tell you your legal rights and what you can do yourself ? for free * recommends that you not contact a consumer reporting company directly * suggests that you try to invent a "new" credit report by applying for an Employer Identification Number to use instead of your Social Security number * advises you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution. You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information.
It's a federal crime to make false statements 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. The Credit Repair Organizations Act By law, credit repair organizations must give you a copy of the "Consumer Credit File Rights Under State and Federal Law" before you sign a contract. They also must give you a written contract that spells out your rights and obligations.
Read these documents before signing the contract. The law contains specific consumer protections. For example, a credit repair company cannot: * make false claims about their services * charge you until they have completed the promised services * perform any services until they have your signature on a written contract and have completed a three-day waiting period.
During this time, you can cancel the contract without paying any fees. Your contract must specify: * the total cost of the services * a detailed description of the services to be performed * how long it will take to achieve the results * any "guarantees" they offer * the company's name and business address. Where to Complain If you've had a problem with any of the scams described here, contact your local consumer protection agency, state Attorney General (AG), or Better Business Bureau. Many AG's have toll-free consumer hot-lines.
Check with your local directory assistance.
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