Thinking of Cleaning Up Your Credit? Think Again.

“Credit repair” - as advertised on the radio, TV, and Internet - tends to be, at best, a waste of money and, at worst, a scam that would simply defraud you or perhaps involve you in fraud yourself. Even if a credit repair company is legitimate, there’s nothing they can legally do that you can’t do yourself at no cost.

This is because there really is no legal way to “repair” bad credit if the history thereof is accurate – only time and ongoing responsible credit management can do that. Credit repair companies can do no more for your credit legally than you can.

Beware of “credit repair” scams

Unscrupulous credit repair operations work by seeking out consumers who have been denied loans or credit based on their poor credit histories. One such common scam is called “file segregation.” Beware when a credit repair company:

• Promises to provide consumers with instructions on how to develop a new credit identity.
• Recommends that you get an Employee Identification Number (EIN) or Individual Taxpayer Identification Number (ITIN) and encourages you to use it in place of your true Social Security number.

Credit Repair: Your legal rights

When the information in Your Credit Report is Inaccurate

The Federal Fair Credit Reporting Act guarantees your right to dispute inaccurate information in your credit report free of charge. You can file a dispute with one of the nation’s national credit reporting agencies to have it corrected or removed.

When the negative information in your file is accurate

If there is negative information in your credit report that is accurate, focus on building better credit for the future rather than trying to have it removed from your credit report. Only time and establishing a positive credit history can “clean up” your credit.

One of the best first steps to getting your credit back on track is seeing what is on your credit report. If you find errors in your credit report, you can take steps to dispute any inaccurate information. It’s also a good way to assess your current credit debt. The next step might be to contact old accounts that carry outstanding debt and arrange payment plans. As you begin to manage your debt successfully, you will also check your credit report on a regular basis to make sure your good efforts are being reported.