How many times have you seen an infomercial on television or read in a newsletter or email about companies offering too good to be true and often misleading services regarding how to repair your credit? They tell you that they can remove bankruptcy, judgments, liens, and bad loans from your credit forever. Some maintain that they can erase all your bad credit once and for all – 100% guaranteed. A few go even further and suggest that it is legal to create a new credit identity at a small cost to you. The truth of the matter is that there is no legitimacy in these claims and that anything a credit repair company can do legally, you can do it yourself at little or no cost.
The Federal Trade Commission (FTC) advises that all consumers should be vigilant of such companies and not believe such claims and become victims of their own negligence. Truth be told, there is no quick fix for creditworthiness. However, it is possible to improve your credit report legally and legitimately overtime through a conscious, devoted effort and a strict adherence to your debt repayment plans.
Companies like these specifically target consumers with poor credit history and lure them into paying a service fee in exchange for promises of cleaning up their credit report so they can finance a mortgage or purchase a car. According to the FTC, it is illegal for them to do so. No one can remove negative information from your credit as long as it is accurate. At the end, the consumer is left with the same credit rating with less money than he started out with. If you are approached by any such agency, here is how to tell whether they are after your money.
• The company does not inform you of your rights as a consumer or advise you on what all you can do for free.
• The company asks for a payment before they can provide service. By law, they are required to complete the services promised before asking for any kind of compensation.
• The company assures you they can remove all negative information on your credit reports even though it is accurate and up-to-date.
• The company advises you to create a new credit identity by applying for an Employer Identification Number and use it in place of your Social Security number.
• The company tells you never to contact the three major national credit reporting agencies (Equifax, Experian and TransUnion) directly.
• The company advises you to dispute everything in your credit report regardless of its authenticity.
Following bad advice may lead you to commit fraud and you may end up finding yourself in trouble with the law. According to the FTC, it is illegal to misrepresent your Social Security number and obtain an Employer Identification Number under false information. Furthermore, it is a federal crime to lie on a loan or credit application. You could face hefty fines and prosecution if you are not aware of the law and your rights and act without considering the consequences of your actions.
This brings up the ultimate question. So what rights does a consumer have? The following should offer some insight.
• Consumers have the right to ask for an investigation of information in their credit report that they consider false, inaccurate or incomplete at no charge at all.
• Consumers are entitled to a free copy of their credit report if they believe their report is inaccurate because of fraud or identity theft. They are also entitled to a free copy if a company takes actions against them such as deny a loan application or insurance.
• Each of the three national credit reporting agencies namely, Equifax, Experian and TransUnion are required by law to provide you with a free copy of your credit report once a year, if you ask for it. To order one, consumers are encouraged to contact them directly via their toll-free number or go to freecreditreport.com.
• There is no financial penalty or fee required to dispute mistakes in your credit report. In accordance with the Fair Credit Reporting Act (FCRA), both the credit reporting company (i.e. Experian) and the information provider such as credit card companies and lending institutions are required to correct false and incomplete information in your credit report.
• Should you find inaccurate information in your credit report inform both, the credit agency as well as the lending institution through writing. Make sure to include copies of documents supporting your notion. Never send originals. Keep those for your records. By law they are required to act on it within 30 days of receiving your request for dispute.
Hopefully the above information should offer you some clarity as to your rights as well as your limitation and make you familiar with how to and how not to proceed and what you can and cannot do. There are legitimate credit repairing companies out there and should you find one, you should definitely consult with them and seek advice. However it is important to mention that it is the consumer’s responsibility to look after his or her credit history and keep it up-to-date and accurate at all times. In today’s modern world, your credit is essentially your identity and all precautions must be taken to ensure it safety and authenticity.
No comments:
Post a Comment