|
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.
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.
|
