Credit Repair Warning Signs



	Credit Repair Warning Signs
Books about Debtor-Creditor Law More Articles, Attorney Locator Legal.com Home Page	by Paula Langguth Ryan
	Excerpted from BOUNCE BACK FROM BANKRUPTCY: A STEP-BY-STEP GUIDE TO GETTING BACK ON YOUR FINANCIAL FEET by Paula Langguth Ryan, Pellingham Casper Communications, PO Box 47, Tracys Landing, MD 20779, 800-507-9244, $19.95 includes s/h.

Most credit repair companies are scams. The simple truth is, no one can get true negative information off your credit report for good. Correct information - good and bad - stays on your record for seven years. Your bankruptcy will stay on your report for ten years (and no more than seven years after you finish repaying your debts under Chapter 13 bankruptcy). There is no legitimate way to remove a bankruptcy from your credit report.

But that doesn't mean that you've got a "black mark" on your credit report. It simply means that the credit bureaus will report that you had a bankruptcy in the past. It's up to you to take the steps necessary to turn that bankruptcy into an asset. And I know you can do it!

As you've just seen, you can build up your credit rating by improving or updating the existing negative information so it reflects you in the best light. You're better off doing this yourself than you are paying someone to do it for you. All it takes is five to six hours of your time. When you're done, you'll know that your credit report contains the best possible credit history it can. And you'll know you didn't get ripped off by a credit repair scam.

If you did get taken in by a credit repair scam, however, don't beat yourself up. Chalk up the money spent as the fee for an important lesson and move on. Get copies of your current credit reports and start using the information in this chapter to update your credit report yourself.

It's easy to see why many people wind up using credit repair companies. Some companies offer a written guarantee that they'll get negative information off your credit report, or you don't have to pay them. Don't believe it! They'll temporarily give you a clean slate and then they'll take your money (usually $500 to $1,000) and run, before the negative information reappears!

Here are a few Credit Repair Warning Signs that will help keep you from being scammed. Avoid any company that:

1. Asks for a large up-front fee of several hundred dollars. Most legitimate companies charge a very small amount for their services, and they don't ask for their money until you are completely satisfied that your credit reports have been corrected.

2. Says they can remove true, negative information from your credit report. The methods these companies use can get negative information taken off your credit reports for a short time - but when the creditor reports that the information is correct, it will be back on your reports again. These companies appeal the bad information on your credit report. By law, the credit bureau must remove the information while it's under investigation. The repair clinic then shows you the next month's credit report, with the negative credit information removed. They charge you their fee, you pay them, and bang - when you apply for a mortgage or a loan down the road - the negative information is back on your credit report and you're out hundreds of dollars.

3. Assures you that they can remove a bankruptcy from your credit report. Unless the bankruptcy was discharged over ten years ago (seven years for a Chapter 13), there is no legal way for anyone to remove your bankruptcy. There is a fraudulent way, which involves requesting your bankruptcy file from the courthouse archives, then questioning the listing on your credit report. I don't recommend it.

Having a bankruptcy listed on your report will not prevent you from getting credit. Other negative information can, however, stop you from getting credit you deserve - which is why I encourage you to rebuild your credit history as soon as possible. If you've been taken advantage of by a credit repair company, contact the Credit Practices Division at the Federal Trade Commission (FTC). To find the number of the nearest FTC office, call 800/688-9889. Once the FTC has a history of consumer complaints against a credit repair company, it can take action to stop the company from continuing business.

One big credit repair company which is currently being sued for credit repair fraud is Credit Resource Management Group (CRMG). Steer clear of these guys.

Finding A Legitimate Credit Repair Company

Legitimate credit repair companies or credit counselors can help you do the perfectly legal strategies that you've just read about. They can write the letters to the creditors on your behalf and work to have negative information updated and have incorrect information removed.

You now have all the tools you need to "do-it-yourself," right here in your hands. But, if you do want to have someone else help you, use the Credit Repair Warning Signs I just gave you to make sure the company is on the up and up. I also recommend that you call your State Attorney General's office to find out if the credit repair company is legitimately licensed to do business in your state. And if you know where the company is headquartered, you can check with the Better Business Bureau in that state to see if the company has any complaints on file.

If the company isn't licensed to do business in your state, or has a long record of complaints about it, keep your money in your pocket. You'll find your State Attorney General's office listed in the blue pages of your telephone book.