Credit Repair Yourself

by Lionel Creech

As Americans push their credit to the limit, scams in all shapes and sizes appear to take advantage of the weak and desperate. In any case, if it sounds ‘too good to be true’, then it probably is. Credit repair is an area where legitimate and illegitimate companies exist. Many firms try to help consumers repair their credit through consultation and cooperation. Credit repair also involves a consumer’s right to dispute their credit history through the credit bureau. If inaccuracies are found, the consumer is entitled to adjustments yet accurate reports will remain in the credit score for 7 years and 10 years for bankruptcies. Thousands of fraudulent credit repair companies exist who claim that if your credit report isn’t 100% accurate, you are entitled to a clean slate. If this were the case, I believe we’d all jump on that opportunity. In any case, you can plead your case to the credit bureau for inaccuracies without the help of these firms. Another technique used is file segregation which uses your employee identification number (EIN) from the IRS and use it to build fresh credit. However good it sounds, it is officially a felony. Congress has taken steps to combat fraudulent firms with the Credit Repair Organizations Act (CROA) which provides information to consumers and attempts to shutdown illegal credit repair firms. Complaints against credit repair companies have risen for three straight years, increasing more than 38% since 2004 according to the Better Business Bureau. A few simple rules apply when looking at these credit repair companies. First, anything a credit repair firm can do for you (legally) is something you can do yourself – for free. Know your rights and make sure that legal documents are provided to you, especially their consumer rights document. Listen for fraudulent behavior such as “only talk to us”, file segregation, paying upfront fees, and piggybacking are a few major problems. Piggybacking means you can “ride” on someone else’s credit. Finally all you have to do is check out if the company is legitimate. Check out Consumer Credit Counseling Services and visit www.nfcc.org.

http://www.ftc.gov/reports/Fraud/finance.shtm

http://money.cnn.com/2008/02/18/pf/saving/toptips/index.htm

http://www.creditcards.com/credit-card-news/credit-resellers-services-1265.php