Do It Yourself Credit Repair
Every
day, companies appeal to consumers with poor credit histories.
They promise, for a fee (usually paid up-front), to clean up
your credit report so you can get a car loan, a home mortgage,
insurance or even a job.
According to hundreds of reports, consumers pay hundreds or
thousands of dollars in up-front fees and these companies do
nothing to improve your credit report, and many credit repair
companies simply vanish with consumer's money. "Credit
Repair Doctors" are strictly regulated under
the Fair
Credit Reporting Act. Their promises that they can
"change your social security number" to hide your
negative credit background are illegal.
It is best to
avoid any type of credit doctor, credit repair firm or service.
Instead, do it yourself. It is easy and inexpensive. You can pay as
little as $10, which is the cost of the Institute of Consumer
Financial Education's Do-It-Yourself
Credit File Correction Guide. It has instructions, sample
letters to smooth communications with the credit reporting agencies,
credit file request forms and a listing of the major credit
reporting agencies. (Note: There are many web sites that offer a kit
for do it yourself credit repair.)
If
you decide to respond to a credit repair offer, beware of companies
that:
-
Want
you to pay for credit repair services BEFORE any services are
provided;
-
Do
not tell you your legal rights and what you can do yourself for
free;
-
Recommend
that you do not contact a credit bureau directly; or
-
Advise
you to dispute all information in your credit report or take any
action that seems illegal such as creating a new credit
identity. If you follow any illegal advice, or commit fraud, you
also may be subject to prosecution.
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