"You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail, and maybe even calls offering credit repair services. They all make the same claims:
â€œCredit problems? No problem!â€
â€œWe can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!â€
â€œWe can erase your bad credit â€” 100% guaranteed.â€
â€œCreate a new credit identity â€” legally.â€
The Federal Trade Commission (FTC) says do yourself a favor and save some money, too. Donâ€™t believe these claims: theyâ€™re very likely signs of a scam. Indeed, attorneys at the nationâ€™s consumer protection agency say theyâ€™ve never seen a legitimate credit repair operation making those claims. The fact is thereâ€™s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.
Recognizing a Credit Repair Scam
Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies canâ€™t deliver an improved credit report for you using the tactics they promote. Itâ€™s illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, youâ€™re left with the same credit report and someone else has your money.
If you see a credit repair offer, hereâ€™s how to tell if the company behind it is up to no good:
The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
The company doesnâ€™t tell you your rights and what you can do for yourself for free.
The company recommends that you do not contact any of the three major national credit reporting companies directly.
The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
The company suggests that you try to invent a â€œnewâ€ credit identity â€” and then, a new credit report â€” by applying for an Employer Identification Number to use instead of your Social Security number.
The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
If you follow illegal advice and commit fraud, you may find yourself in legal hot water, too: Itâ€™s a federal crime to lie 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. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.
Your Rights Regarding Credit Repair
No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Some people hire a company to investigate on their behalf, but anything a credit repair clinic can do legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA):
Youâ€™re entitled to a free report if a company takes â€œadverse actionâ€ against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. Youâ€™re also entitled to one free report a year if youâ€™re unemployed and plan to look for a job within 60 days; if youâ€™re on welfare; or if your report is inaccurate because of fraud, including identity theft.
Each of the nationwide consumer reporting companies â€” Equifax, Experian, and TransUnion â€” is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. The three companies have a central website, a toll-free telephone number, and a mailing address for consumers to order the free annual credit reports the government entitles them to."
The Fair Credit Reporting Act states:
Consumer reporting companies must investigate the items you question within 30 days. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider receives notice of a dispute from the consumer reporting company, it is required to investigate, review the relevant information, and report the results back to the consumer reporting company. If this investigation reveals that the disputed information is inaccurate, the information provider has to notify the nationwide consumer reporting companies so they can correct it in your file.
When the investigation is complete, the consumer reporting company must give you the results in writing, too, and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the consumer reporting company is not permitted to put the disputed information back in your file unless the information provider verifies that it is accurate and complete.
If they cannot verify the information to be accurate within 30 days, they can no longer report it to the credit bureaus. This is how we legally can investigate and remove items from credit reports. We achieve between 55 - 80% removal within 90-120 days.
Allied Credit Solutions
800 901-8122 ext 211
If the chargeoff is a legitimate debt, not a mistake because it was never your account, then you CANNOT REMOVE this item from your credit report.
Only errors can be removed from credit reports. For instance, incorrect previous address, mis-spelled names, a credit account belonging to a family member with the same name (Senior versus Junior).
If you have a derogatory account---late payments, chargeoffs, collection accounts, judgments---and these were REALLY your account then they cannot be removed.
If a derogatory account is on your report as an error on the part of the creditor (you really paid the bill on time but the creditor reported incorrectly) then you can have that error removed.
If a derogatory account such as a chargeoff, collection account or judgment shows open/unpaid but you really paid it, then you can have your credit report updated to reflect the account as paid.
Any recent activity on a derogatory account can likely lower your credit score.
Beware of anyone offering to repair your credit; according to the FTC, these credit repair schemes are SCAMS.
Instead sit down with a Licensed Mortgage Banker and have your credit reviewed free of charge by a professional who can guide you according to proper and legal standards.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
That is exactly what we do at Allied Credit Solutions. Our program is 180 days maximum, and we offer a 100% money back guarantee. We are a Credit Service Organization, not credit repair, and we are licensed, bonded and registered with the State. We use the FCRA and your consumer rights to remove items from your credit report. We do not dispute, but go directly to your creditors to verify the validity of your accounts. We offer permanent removal of items that cannot be verified.
I can do a consultation at no cost to you. Check us out at http://www.alliedcreditsolutions.com and then give me a call.
National Account Rep
Allied Credit Solutions
800 901-8122 ext 211
Licensed Real Estate Salesperson
Rapid Realty Clinton Hill North
880 Bedford Avenue
Brooklyn, NY 11205