Beware of Bogus Credit Repair Companies!
So-called "credit repair" companies claim they can remove negative information from credit reports. Advertising as "Credit Advisors," "Credit Rating Correction Services" or "Credit Consultants," they trumpet variations on this message: "Turned down because of bad credit? We can help!" Many of these companies charge hundreds if not thousands of dollars for the promise to "clean up" bad credit reports. But the truth is, these companies can only do what you could do yourself--at no charge.
Nobody can remove negative information that is accurate from your credit report. No company has a "secret" ability to remove all negative information.
But this doesn't stop their claims. This deceptive quote is from a credit repair company brochure: "Charged-off accounts, collection accounts, judgments, tax liens, repossessions, and even bankruptcies can be removed from your credit records in less than one year (five to seven month average)."
One tactic is to bombard credit reporting agencies with requests to verify information. If a credit reporting agency cannot verify an entry within 60 days, it will remove the information from the report. But if the information is later verified to be accurate, it will go back in the report.
Before you even consider signing a contract with a company that promises to repair your credit, remember these facts:
- You may obtain a copy of your credit report on your own.
- You have the right to dispute entries in your credit report.
Beware guaranteed credit offers!
Credit repair and other companies often claim they "guarantee" to get you a credit card, regardless of your credit history. In fact, these companies do not always honor their guarantee. Sometimes, they'll just take your money and run--you will not get any credit, regardless of what they promised.
If they get you a card at all it often will be a "secured" bank credit card, with high up-front "application" fees, that requires you to deposit and keep several hundred dollars in a savings account, or a card that only allows you to buy items in a catalogue from a business that you probably never heard of. (You can apply for a secured credit card by yourself. For a free list of banks that do not charge application fees for secured cards, see the information from Consumer Action in the "For More Information" section below.)
Credit repair companies often advertise on television, in newspapers and even on matchbooks. Sometimes they require consumers to dial a "900" telephone number to get more information. Calls to 900 numbers can cost $2 or $3 a minute, so listening to a few minutes of information about the cards can be expensive.
Some companies try to get people a credit card by having them apply using financial information of other people with good credit histories. It is a criminal act to apply for credit under someone else's name--do not do business with one of these companies.
Law enforcement agencies have shut down many credit repair outfits, but it is hard to stop a fraudulent credit repair outfit unless people complain about it. Therefore, be careful about responding to credit repair ads and be sure to complain to the agencies listed below if you think a credit repair company took advantage of you.
For more information
- The Federal Trade Commission (FTC) publishes information for consumers on the subject of credit and enforces federal laws on credit. For a list of free publications, write to the FTC's Public Reference Department at the address given below. While the FTC does not handle individual cases, it can act when it sees a pattern of possible law violations develop. Complaints about credit reporting agencies and credit repair scams must be in writing. Send them to: FTC Credit Practices Division, 6th St., N.W., Washington, DC 20580.
- Contact your local consumer protection agency or your state Attorney General's office. Many Attorneys General have toll-free consumer hotlines. These numbers may be listed in the "self-help" or government sections in the front of your phone book. These agencies can offer you advice and may also be able to help resolve your complaint.
- Consumer Action's free complaint/information switchboards offering non-legal consumer advice and referrals can be reached from 10 a.m. to 2 p.m. on weekdays. Chinese, English and Spanish are spoken. Call either (415) 777-9635 (San Francisco office) or (213) 624-8327 (Los Angeles office). Consumer Action has a free list of secured credit card banks that do not charge application fees. To receive a free copy, send a self-addressed stamped envelope to: Consumer Action Secured Credit Card Survey, 717 Market St., Suite 310, San Francisco, CA 94103. (Available in English only.)
- The Consumer Credit Counseling Service (CCCS) assists consumers who have problems in paying their bills--before their good credit ratings suffer. Your local CCCS office can help you work out flexible payment plans to make debt repayment more feasible. Call (800) 388-CCCS for an interactive recording that will provide you with the phone number of the office nearest to you. Spanish-speakers can call (800) 68-AYUDA (800-682-9832) between 8 a.m. and 7 p.m. central time.
- Before you sign a contract with any company, check it out with the local Better Business Bureau (BBB), a non-government service which advises consumers on fraud prevention. Call your local BBB. If you cannot find a local number listed in the phone directory, call the Council of Better Business Bureaus at (703) 276-0100 for a referral to the office nearest you.
About The Author
© Copyright. http://www.deleteuglycredit.com
Omar M. Omar is the owner of http://www.deleteuglycredit.com. The website is dedicated to provide credit consumers with information about their credit right and how to dispute inaccurate information on their credit report. Omar M. Omar is also the author Of "The Credit Repair Bible" book.
You have permission to publish this article electronically or in print, in your Newsletter, on your website, or in your E-Book, as long as the author's Resource Box is included with the article.
MORE RESOURCES:
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 China Daily | Credit cards next in line for tightening Atlanta Journal Constitution, USA - By MARK GONGLOFF As consumers watch their wealth disappear in the markets, some are also at risk of losing one of their last spending lifelines: credit ... Fear gripping Wall Street Bailout should not include price controls on low-limit credit cards Fed's new arsenal firing blanks |
US consumer credit posts worst drop ever National Post, Canada - US consumer credit plummeted by US$7.9-billion dollars in August - its sharpest drop on record, US Federal Reserve figures showed Tuesday. ... US consumer credit declines for first time in over decade Consumer Credit Drops for First Time in 10 Years US Consumer Credit Dropped by the Most on Record (Update1) |
 Reuters | With Credit Drying Up, Car Buyers Bring Cash New York Times, United States - Tighter credit was a crucial factor in the stunning 26.6-percent drop in September vehicle sales in the United States. In September, sales fell below 1 ... Credit crunch hits auto market's weak link 700 US dealerships could close this year, says head of dealer group Auto dealers looking for the end of the credit crisis tunnel |
 Reuters | Former AIG CEOs back credit default swap regulation Reuters - N: Quote, Profile, Research, Stock Buzz) said they would back regulation of the credit default swaps market in testimony at the US House Oversight and ... Unregulated swaps hastened Wall Street collapse New York insurance regulator calls for regulation of credit ... Greenberg Says Federal Loan to AIG Is Bad Deal |
 Thanh Nien Daily | Libor for Overnight Dollar Loans Jumps as Credit Freeze Deepens Bloomberg - The seizure in global credit markets is deepening on speculation central bank attempts to revive lending between financial institutions won't work, ... Credit gears of commerce are still jammed Credit markets still tight as stocks plunge Credit fears threaten to clobber world economy |
 Boston Globe | Crude Oil Falls as Demand Slumps, Credit Market Turmoil Worsens Bloomberg - Global stock markets have plunged as banks freeze credit lines to investors and companies. ``Demand destruction is prevalent in developed countries with ... Canada energy stocks slump on credit woes, outlook Crude Oil Falls as Worsening Credit Crisis May Curb Fuel Demand |
Corporate America Credit Union and FIMAC Reach Agreement to Offer ... MarketWatch - Based in Birmingham, Alabama, CACU has over $1.4 billion in assets, and serves the financial needs of 174 member credit unions. ... |
 Voice of America | Small US Businesses Feel Pinch of Tightened Credit Voice of America - By Mike O'Sullivan As the US Federal Reserve System announced measures to ease the credit crisis Tuesday, small business owners around the United States say ... |
 New York Times | Federal solar tax credit extended San Antonio Business Journal, TX - The Solar Electric Power Association expects solar generation to expand significantly thanks to the extension of federal solar tax credits to utilities. ... Solar energy gets huge earmark in bailout bill Will Coal Be Cashing In On the New Tax Credit?  Comment by Gregory Wetstone AWEA Sr. Director of Governmental & Public Affairs |
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