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Credit repair scam - How to avoid being a
statistic?
A good credit history is critically important
for the consumer. A bad credit will prevent you
from getting a business loan, owning a home, or
even a job. Promises to "fix" your credit are
always made by credit consolidation companies,
but they are seldom true. Here are some of the
important tips to avoid scams:
First things first. Negative information
cannot be erased if the information is correct.
Only inaccurate information can be corrected in
your credit file. Credit file information
remains on your record for seven good years from
the time it is reported to the bureau. For
bankruptcy, the information remains on your
record for ten years. All the consolidated
information about your credit bills you fell
behind on, but are now paid, will remain on your
report for the time period mentioned above.
Do not pay the credit repair company unless
their promises are kept. Remember, the law is on
your side. Federal law requires credit repair
companies to give you a complete detailed
explanation of your legal rights, a completely
documented written contract, and above all, 3
days to cancel. This applies to all credit
repair services including for-profit services,
non-profit services, creditors and credit
unions.
Be wary about emails you receive. When you
hover your mouse over the link in the email, you
will know for sure if it is a trusted website or
a fraudelent one. If fraudelent, report it to
your bank promptly.
You don't need a counselor to correct your
mistakes in the credit report. Take charge of it
yourself. If you were recently denied credit,
you can request a free credit report. Otherwise
there is a small charge for it. Some states will
allow you a free copy of your credit report once
a year. It doesn't cost you anything to dispute
or question items in your credit report. Get
online or follow instructions from your credit
bureau. The three major credit bureaus are
Equifax (800- 685-1111), Experian (800-682-7654)
and Transunion (800-916-8800). In most cases you
will need to contact all the three credit
bureaus as the information they have about you
may vary.
Remember that you can't create a second
credit file. Some of the fraudelent companies
will offer to provide the consumers with a
different social security number (tax
identification number if ssn does not exist) in
order to create a new credit file for the
consumer. Such a practice is called as "file
segregation". File segregation is illegal and
does not work.
Whereever possible, add explanation to your
credit report to prove your point. If you have
legitimate reasons for not paying certain bills
on time (switching jobs, illness), or if you
refused to pay because of a dispute, send the
bureau a statement to be tagged with your credit
report. Each lender who pulls your report will
be aware why you fell behind on those bills.
Counseling might be a good option. Find a
good non profit consumer credit counseling
service in your neighbourhood. Get online or
open your yellow pages to find one. Seek the
guidance of friends and family members. Select a
counselor, meet them in person to make sure they
are right for you. Ask them on tips and advice
on how to build a good credit history. If you
are still lagging behind on your payments,
credit consolidation firms will be able to set
up a payment plan with your creditors. If money
is an issue, select a non profit credit
counseling service. They will offer their
service for free or for a very low cost.
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