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You’re up to your eyeballs in
debt, and getting lots of calls from collection
agencies. You’re starting to feel
desperate about making it all go away, and have
even thought about bankruptcy as a possibility.
Then you see an ad or get a flier in the mail
from a credit repair company claiming that, for
a fee, they can erase your bad credit and give
you a new credit identity. Sound too good
to be true? It is.
The Federal Trade
Commission (FTC) is cracking down on credit
repair websites that promise consumers they can
restore their creditworthiness for a fee.
Over 180 websites have been put on notice that
their credit repair claims may violate state and
federal laws. According to the FTC, many
credit repair operations “guarantee” that they
can remove negative information from consumers’
credit reports, even if the negative information
is accurate and timely. Sorry to rain on
your parade — it isn't
true.
The FTC has also identified over 60 credit
repair operations that sell instructions on how
to substitute a false social security number for
your current number and create a new credit
identity. Doing so violates federal law.
The truth is:
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Accurate and timely
negative information cannot be removed from
a credit report in an effort to repair it.
However, we can help you remove inaccurate
credit information, and in California you
had to have been warned before the negative
credit information was placed on your credit
report.
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It’s not only a bad idea
to create a new credit identity using a
false Social Security Number, it’s also
illegal. It gets you nowhere.
In the end, you will be in worse shape than
before and you may even go to jail.
If you have had someone suggest this option,
ignore all the "guidance" you get from them!
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When it comes to credit
repair, only time and a personal debt
repayment plan will improve your credit
report. |
The last thing you want to do
is worsen your financial situation by choosing
credit or debt repair "help" that wastes your
time and puts you further behind on your debts.
If you decide to look into a credit repair
offer, beware of the following warning signs
offered by the FTC:
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The company wants you to
pay for credit repair services before any
services are provided. (This is
illegal and we will sue the perpetrators for
you.)
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They don’t tell you your
legal rights and what you can do yourself
— for free.
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They recommend that you
not contact a credit bureau directly.
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They suggest you invent a
new credit identity by applying for an
Employer Identification Number to use
instead of your social security number.
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They advise you to
dispute all information in your credit
report or do something else that seems
illegal.
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They tell you to stop
paying your debts and allow them to
negotiate the balance —
for a fee. |
Under the federal Credit
Repair Organizations Act, credit repair
companies can’t require you to pay until they’ve
completed the services you contracted for.
You also have the right to cancel your contract
with a credit repair company within three days
of the day you sign it. Federal law also
requires a credit repair company to provide you
with information about your legal rights and
what you can do to improve your credit rating
yourself, including the following:
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You have the right to
dispute inaccurate information in your
credit report by contacting the credit
bureau directly. There are specific
procedures a credit reporting agency follows
to determine the accuracy of credit report
information, and the credit reporting agency
must change or remove inaccurate or
incomplete information.
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If the credit bureau’s
investigation doesn’t resolve the dispute to
your satisfaction, you can send a brief
statement explaining your side of the story.
The credit reporting bureau must include a
summary of your statement with any report
they issue on you.
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You have the right to
obtain a copy of your credit report from a
credit bureau. There’s no charge if
you’ve been turned down within the last 60
days for credit, employment, insurance, or
as a renter because of information in your
credit report. You’re also entitled to
a free copy of your credit report if you’re
unemployed and intend to apply for
employment in the next 60 days, if you’re
receiving public welfare assistance or if
you think there’s inaccurate information in
your credit report due to fraud. |
Any contract you sign with a
credit repair service must include the payment
terms for services (including the total cost), a
detailed description of all services to be
performed, how long it should take to get
results, any guarantees and the company’s name
and business address.
The reality is that no one can make accurate
negative information disappear from your credit
report. Only the passage of time — seven
years for most information, 10 years for
bankruptcy information — can accomplish that.
If you have been subjected to
any of these illegal practices,
please contact our office. |
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