subject: Beware Credit Repair Scams [print this page] Some common scams for credit repair are as follows:
Getting a new social security number - People are only allowed to have one social security number. It is against the law to use a different number or to create a false identity.
Getting a Federal Employer Number-companies who endorse this claim you can obtain a federal tax ID number and this is illegal. A new credit report under an EIN will not show any credit history and it is very unlikely that a creditor would regard new business with no history.
Challenging Every Negative Entry on a Credit History - As a general rule, it is lawful for credit agencies to keep accurate records of negative entries on your credit history for up to seven years, and to keep records of any bankruptcies for up to ten years. There are certain circumstances where truthful negative information may be reported beyond those time periods.
As much as you do not like having negative information on your credit report, your ability to object to inaccurate information is not meant to be a license to harass honest creditors in an effort to remove accurate negative entries.
Common Misrepresentations by Credit Repair Companies
"If you have declared bankruptcy, you can't get credit for ten years" - The truth is you can start building a positive credit history as soon as your bankruptcy is resolved. While creditors will be cautious at first, you can gradually demonstrate your fiscal responsibility, and build a history that can lead lenders to view you as a good credit risk long before the bankruptcy drops from your credit history.
Warning Signs of a Bad Credit Repair Company
Do not use any credit repair company that doesn't follow industry standards or regulations.
Do not use a credit repair company that offers to "wipe out bankruptcies", to remove accurate negative information from your credit history, or to obtain credit for you regardless of your credit history.
Do not use a credit repair company unless it provides a written disclosure of your rights in relation to your credit history before asking you to sign a contract.
The agreement should also include a right to cancel lasting at least three days, in case you have second thoughts.
Do not use a credit repair company that attempts to charge money before it has performed the credit repair services.
Do not use a credit repair company that discourages you from directly contacting the major credit bureaus.
Removing Inaccurate Information From Your Credit History
Although the process can be slow, it is relatively simple to object to inaccurate information on your credit history.
After you obtain a copy of your credit report, review it for any inaccuracies. If you don't understand some of the entries on the report, ask the credit reporting agency what they mean.
Once you have identified any inaccurate entries, notify the credit bureau about the entries you believe to be in error, providing as much information as you can about the error. For example, if you paid a debt which is reflected on your credit report as delinquent, you may wish to provide a copy of a cancelled check reflecting payment.
Once you make the report, the credit agency is responsible to investigate any errors at no expense to you, and to either verify the information in the credit report or to remove any information that is inaccurate or which cannot be verified.
You may also contact creditors directly, to let them know of any errors, and to ask that they correct their records and forward accurate information to the credit reporting agencies.
If you are unable to obtain the removal of information from your credit report, and still object to its inclusion, you may submit a written objection (up to 100 words in length) to the credit reporting agency, explaining your side of the story. The explanation will be included in your credit report, and will be distributed to anybody who obtains a copy of the report.
If you wish to obtain copies of your credit reports, the major credit reporting agencies are:
