- August 1996 - Produced in cooperation with Associated Credit Bureaus You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims:
Do yourself a favor and save some money, too. Dont believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report. This brochure explains how you can improve your credit worthiness and lists legitimate resources for low or no-cost help. The Scam Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they cant deliver. After you pay them hundreds or thousands of dollars in up-front fees, these companies do nothing to improve your credit report; many simply vanish with your money. The Warning Signs If you decide to respond to a credit repair offer, beware of companies that:
You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. Its a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. Thanks to the new Telemarketing Sales Rule, it's also a crime for telemarketers who offer credit repair services to require you to pay until six months after they've delivered the services. The Truth No one can legally remove accurate and timely negative information from a credit report. But the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act:
Clearly identify each item in your report that you dispute, explain why you dispute the information, and request a reinvestigation. If the new investigation reveals an error, you may ask that a corrected version of the report be sent to anyone who received your report within the past six months. Job applicants can have corrected reports sent to anyone who received a report for employment purposes during the past two years. If the reinvestigation does not resolve your dispute, have the credit bureau include your version of the dispute (up to 100 words) in your file and in future reports. Remember, there is no charge for a reinvestigation. Reporting Negative Information Accurate negative information generally can be reported for seven years, but there are exceptions:
Have You Been Victimized? Many states have laws strictly regulating credit repair companies. States may be helpful if youve lost money to credit repair scams. If youve had a problem with a credit repair company, dont be embarrassed to report the company. Contact your local consumer affairs office or your state attorney general (AG). Many AGs have toll-free consumer hotlines. Check with your local directory assistance. You also may wish to contact the FTC. Although the Commission cannot resolve individual credit problems for consumers, it can act against a company if it sees a pattern of possible law violations. If you believe a company has engaged in credit fraud, send your complaints to: Correspondence Branch, Federal Trade Commission, Washington, DC 20580. The National Fraud Information Center (NFIC) also accepts consumer complaints. You can reach NFIC at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday, or at http://www.fraud.org on the Internet. NFIC is a private, nonprofit organization that operates a consumer assistance phone line to provide services and help in filing complaints. NFIC also forwards appropriate complaints to the FTC for entry on its telemarketing fraud database. Need Help? Don't Despair Just because you have a poor credit report doesnt mean you wont be able to get credit. Creditors set their own credit-granting standards and not all of them look at your credit history the same way. Some may look only at more recent years to evaluate you for credit, and they may grant credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards. If you cant resolve your credit problems yourself or you need additional help, you may want to contact a credit counseling service. There are non-profit organizations in every state that counsel consumers in debt. Counselors try to arrange repayment plans that are acceptable to you and your creditors. They also can help you set up a realistic budget. These counseling services are offered at little or no cost to consumers. You can find the office nearest you by checking the white pages of your telephone directory. In addition, nonprofit counseling programs sometimes are operated by universities, military bases, credit unions, and housing authorities. Theyre also likely to charge little or nothing for their services. Or, you can check with your local bank or consumer protection office to see if it has a list of reputable, low-cost financial counseling services. Do-It-Yourself Check-Up For Free Even if you dont have a poor credit history, its a good idea to conduct your own credit check-up, especially if youre planning a major purchase, such as a home or car. Checking in advance on the accuracy of the information in your credit report could speed the credit-granting process. Credit bureaus usually are listed in the yellow pages of your telephone book under "credit reporting agencies." Three large national credit bureaus supply most credit reports: TRW, Equifax, and Trans Union. You may want to contact each of them for a copy of you report. TRW Information Services Equifax Credit Information Services, Inc. Trans Union Corporation For More Information The FTC enforces a number of federal laws involving consumer credit for which free publications are available. If you would like copies of the publications listed below, write or call: Public Reference, Federal Trade Commission, Washington, DC 20580; (202) 326-2222. TDD: (202) 326-2502.
You also can access FTC publications at http://www.ftc.gov on the Internet. 3/96; 8/92; 9/91; 5/91 |
