Credit Repair: How to Help Yourself and Recognizing a Credit Repair Scam

federal-trade-commission-ftc-logo-resized-600In an article written by The Federal Trade Commission (FTC), the organization discussed credit repair — how to help yourself and how to recognize a credit repair scam. Below are a few of the points it covered.

How many times have you seen flyers offering credit repair services? Perhaps you have even gotten phone calls? The FTC warns that claims with messages such as these are likely signs of a scam:

  • Credit problems? No problem!
  • We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!
  • We can erase your bad credit — 100% guaranteed.
  • Create a new credit identity — legally.

If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:

  • The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
  • The company doesn’t tell you your rights and what you can do for yourself for free.
  • The company recommends that you do not contact any of the three major national credit reporting companies directly.
  • The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
  • The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
  • The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.

There are rights you have regarding credit repair.

The FTC points out:
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. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost.

Additionally, there are ways in which you can help yourself and things that a credit repair company cannot do. You should also review your credit report periodically to protect yourself. In the full article, learn more, including how you can get help if you have been victimized.

The FTC works to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.

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