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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. Everything a credit
repair company or clinic can do for you legally, you can do for
yourself at little or no cost. According to the Fair Credit Reporting
Act (FCRA):
Credit Repair Scams
Spotting credit repair scams
Be leery if you are tempted to contact a
credit repair company. The Federal Trade
Commission and several attorneys general have sued credit-repair
companies for falsely promising to remove bad information from credit
reports. Here are tips to follow to spot credit repair scams:
Avoid credit repair
companies that tell you truthful information can be changed or erased
to improve your credit or that only the credit repair company can remove
old or inaccurate information. These claims are false. Be
wary if you are asked for a large sum of money before the credit repair
company completes the job. A money-back guarantee will not protect you
from a disreputable company.
Avoid new credit identities
If you have filed for bankruptcy, you may be the target of a credit
repair scheme, often called “file segregation.” Here, you are promised a
chance to hide unfavorable credit information by establishing a new credit
identity. However, there is a problem: File segregation is illegal. If you
use it, you could face fines or imprisonment.
Other credit repair scams
Consumers looking for an easy fix often are targets of other credit related
scams:
Credit by phone:
Pay-per-call or 900-number services have become a popular vehicle for
credit scams. Advertisements promise that “guaranteed” credit or cash
loans are only a phone call away. Instead, the caller might only receive a
list of banks offering low-interest credit cards or a booklet on how to
establish credit — and a phone charge of $50 or more. Consumers rarely end
up getting credit.
Gold or platinum cards:
Beware of promotions for gold or platinum cards that promise to get you
credit and build your rating. Although they may sound like all-purpose
credit cards, some cards only permit you to buy merchandise from special
catalogs and will not help you obtain other credit. You also might be
asked to call a 900 or 976 exchange number for more information. These
phone charges add up quickly.
Checking-account scam:
This scam, which tricks you into disclosing your checking-account number,
typically begins with a postcard advertising easy credit approval or
low-interest credit card rates. When you call, you are asked for your
checking-account number as “verification.” Your number then can be
magnetically encoded on a draft, which is forwarded to your unsuspecting
bank for payment from your account.
Taking control of credit
If you need help paying your bills, you have several options:
Contact your creditor and
try to work out an adjusted repayment plan. Check
your telephone directory for nonprofit financial counseling programs. Some
universities, county extension centers, military bases, credit unions,
housing authorities and banks operate programs and charge little, if
anything, for assistance. Contact
Consumer Credit Counseling Service, a nonprofit agency. Debt counselors
will try to arrange a repayment plan that is acceptable to you and your
creditors and will set up a budget for you. Call 800-388-2227 for the
nearest CCCS office.
When you deal with a credit repair company assume that
it is a credit repair scam and be very cautious!
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