Beware of Bogus Credit Repair Companies
Beware of Bogus Credit Repair Companies!
by: Omar M. Omar
So-called "creditrepair" companies claim they can remove negative information from creditreports. 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 creditreports. 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 creditreport. No company has a "secret" ability to remove all negative information.
But this doesn't stop their claims. This deceptive quote is from a creditrepair company brochure: "Charged-off accounts, collection accounts, judgments, tax liens, repossessions, and even bankruptcies can be removed from your creditrecords in less than one year (five to seven month average). "
One tactic is to bombard creditreporting agencies with requests to verify information. If a creditreporting 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 creditreport on your own.
You have the right to dispute entries in your creditreport.
Beware guaranteed creditoffers!
Credit repair and other companies often claim they "guarantee" to get you a creditcard, regardless of your credithistory. 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 creditcard, 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. (You can apply for a secured creditcard by yourself. For a free list of banks that do not charge application fees for secured cards, see the information from Consumer Action in the "For More Information" section below. )
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 creditcard by having them apply using financial information of other people with good credithistories. It is a criminal act to apply for creditunder someone else's name--do not do business with one of these companies.
Law enforcement agencies have shut down many creditrepair outfits, but it is hard to stop a fraudulent creditrepair outfit unless people complain about it. Therefore, be careful about responding to creditrepair ads and be sure to complain to the agencies listed below if you think a creditrepair company took advantage of you.
For more information
The Federal Trade Commission (FTC) publishes information for consumers on the subject of creditand 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 creditreporting agencies and creditrepair 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 creditcard 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 creditratings 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.
Omar M. Omar
About the Author:
© Copyright. www.deleteuglycredit.comOmar M. Omar is the owner of www.deleteuglycredit.com. The website is dedicated to provide credit consumers with information about their credit right and how to dispute inaccurate information on their credit report. Omar M. Omar is also the author Of "The Credit Repair Bible" book.You have permission to publish this article electronically or in print, in your Newsletter, on your website, or in your E-Book, as long as the author's Resource Box is included with the article.omar(at)deleteuglycredit.com