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“Don’t worry about bad credit. For only $29.99, we’ll
erase your bad credit history and provide you with a fresh
start!” Heard that one before? Don’t believe it
or you may be throwing much more than $29.99 down the drain.
Some of these so-called “credit repair” companies have charged
their customers thousands of dollars to do what you can do
for yourself.
Basically, anything that
a credit repair service can provide, you can accomplish on
your own. You may decide that you would rather a reputable
company do the “leg-work” for you, but make sure you understand
what they can and cannot legally do and make sure they are
legitimate.
First, understand that
if accurate negative information appears on your credit report,
nothing but time and slowly rebuilding your credit history
will solve the problem. The negative information will
remain on your credit report for seven to 10 years.
Sometimes a fraudulent
credit repair scam will offer to provide customers with a
new social security number so they can create a new credit
file. This practice is called “file segregation” and
it is illegal. If you file fraudulent information over
the phone, through the mail or over the Internet, you could
be charged with a federal crime and chances are the credit
repair scam artist will be long gone.
If, in fact, the credit
repair company is able to provide you with a new credit card,
it will probably be a “secured” credit card, which you have
to “secure” with a cash deposit in order to draw on the credit
line. Additionally, you are probably looking at a high
application fee and high interest charges.
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It is also a federal
crime for a credit repair company to make false claims about
their services. Be aware that the company cannot charge
you until they have performed the promised services.
These companies also need to provide you with a written contract
that details what services they will provide, the total cost,
and the length of time it will take to achieve results.
The company must also inform customers that they have three
days to cancel their contract at no charge.
If you feel you have been
defrauded by a credit repair scam artist, contact the Consumer
Affairs Division of the state’s Attorney General’s Office
If you find yourself with
a bad credit history, you should obtain a copy of your credit
report from one of the three major credit reporting bureaus.
If you find erroneous information on your report, you should
write to each of the three bureaus and provide corrected information.
If you’ve been denied credit in the past 60 days, you are
entitled to a free copy of your credit report. Phased
in over the next year, credit bureaus will be required to
provide a free credit report upon request in all 50
states.
Remember, bad credit can
be repaired only if you approach it with disciplined and sensible
financial management. Once you establish
a new reliable payment history, your chances of receiving
the credit you need will improve.
CONSUMER TIPS is provided as a public
service by the Missouri Independent Bankers Association
AND
Community Bank of the Ozarks
P.O. Box 43
Sunrise Beach, MO 65079
(573) 374-5245
1-800-927-4314
www.cbobanker.com
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