Everyday, companies target people who have poor credit histories with promises to clean up their credit reports so they can get a car loan, a home mortgage, insurance, or even a job – after paying a fee for the service. The truth is that no one can remove accurate negative information from your credit report. It's illegal.
When negative information in your report is accurate, only the passage of time can assure that it will be removed. A consumer reporting company can report most accurate negative information for seven years and can report bankruptcy information for 10 years.
If you get an offer to repair or fix your credit, how can you know if it’s legit? Here are some signs that should set off alarms in your head – and make you put the offer in the trash:
Fact: Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the credit repair services they promised.
Fact: The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. This investigation doesn’t cost any money.
Fact: Under the Fair Credit Reporting Act (FCRA), the consumer reporting company and the information provider (the person, company, or organization that provides information about you to the consumer reporting company) must correct inaccurate or incomplete information in your report. To take advantage of all your rights under the FCRA, contact the consumer reporting company and the information provider in writing.
Fact: Any credit repair company that claims to be able to legally remove accurate and timely information from your credit report is lying. There’s no easy fix for bad credit. Improving your credit takes time and a conscious effort to pay your debts.
Fact: If you follow illegal advice like this, you may find yourself in hot water. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, or to get 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.
The FTC acts aggressively against “credit repair” scams, which are marketed as quick and easy ways to rid individual credit reports of negative information. In the last 10 years, the Commission has brought more than 40 cases against con artists that allegedly lied about their credit-related services. In one recent case, the FTC charged Bad Credit B Gone, LLC, with violating federal laws by claiming it could improve most consumers’ credit reports by removing negative information that was accurate and not obsolete. The court ordered the company to pay more than $322,000 in equitable monetary relief.
There's No Easy Fix for Bad Credit
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To learn how to improve your credit worthiness and find legitimate resources for low or no-cost help, see: