Going through either the electronic or the print media one would come across numerous ads about credit repair. One would get mails, and offers for credit repair services. Numerous mails, ads and fillers would greet the prospective customer who is trying for credit repair. All of them would promise easy credit repair. Unfortunately most of the promises will never be fulfilled. It would therefore be prudent to follow the advice FTC for self credit repair.
Federal Trade Commission Advice
Advices rendered by FTC or the Federal Trade Commission are that:
- Debtors should not be carried away by the publicity gimmicks of unscrupulous traders;
- They should avoid running into some scam;
- There hardly is any legitimate credit repair operation in the country;
- No quick fix solution is available for credit repair;
- Legitimate credit report improvement requires time and conscious effort;
- Devising a personal credit repayment plan would be the best course.
See the Trap
Unscrupulous companies target poor consumers with bad credit histories. With lucrative promises to clean up their credit history and reports, they allure them into the trap set. To attract such customers they promise easy loans, mortgage, insurance or jobs. Unfortunately these companies cannot deliver such improved credit report using such tactics they promote. Reason is that no one can remove accurate negative information from the credit report. Despite spending huge amount of money on credit repair using the services of such companies, the debtor finds him still with bad credit report.
Identifying the Scam
When an offer comes the way of the prospective customer, he or she should look at it and find out the following aspects to know whether it is genuine of scam.
- Company asks for payment before offering any service. Such process violates the provisions of Credit Repair Organizations Act. Credit companies cannot require customer to pay till the completion of the services.
- Company does not inform the customer of his or her rights and what is offered free of cost.
- Customer is restricted from approaching any of the three major credit bureaus.
- Promises are made about removal of genuine and authentic negative information from credit report.
- Company advises the customer to invent new credit identity and get new credit report.
- Customer is prompted to use employer identification number instead of social security number for financial transactions.
- Client is advised to dispute all the entries in credit report irrespective of their accuracy.
Following Illegal Advice Can Invite Trouble
When a client adheres to illegal advices of the company rendering credit repair services, he is sure to invite trouble. Resorting to falsehood in credit application amounts to fraud and a federal crime and invites consequential punishments. One could be charged as well as prosecuted for mail or wire frauds for using mail or telephone to transmit false information.
Learn about Your Rights
Clients should know about their rights regarding credit repair and all related issues. Disputes can be filed and investigations can be requested if there are mistakes in the reports. Such disputes and request for investigations are free of cost. Of course one can obtain the services of professional companies to carry out the tasks on their behalf. Fact remains that what these companies can do the client can do as well. Thus there is no justification of paying a good deal of money for such services which can be rendered by self help.
Provisions of FCRA
Fair Credit Reporting Act or FCRA provides that:
- Client is entitled to a free report when any company takes an adverse action against such client;
- Such action might include denial of credit, insurances, or employment;
- One can ask for report within 60 days of receipt of notice about the action;
- Unemployed people are entitled for free report every year from each of three major credit reporting bureaus, when asked for.