Consumer News

Credit Repair

How much do you know about A financial services product that clearly was created by a magician, since it’s a complete illusion – a product that isn’t really there. Ads promoting such illusions will frequently appear on the internet and via e-mail, persuade you to spend your money in order to improve your credit score or remove derogatory (i.e., negative) items from your credit report, then just as suddenly make your money disappear?  Let’s test your knowledge and see if you can separate fact from fiction:

True or False?  A credit repair company can fix your credit problems with a quick phone call.

False. Despite what you may have heard a million times in TV and radio ads, you cannot pick up the phone and improve your credit.  The only things that will ever – ever – repair your credit are improved repayment performance and time.  No one, not even the president, will ever be able to repair your credit for you.

True or False?  A credit repair company can remove inaccurate info from your (Sometimes called a “Consumer Report.”) A communication of any information by a credit reporting agency that bears on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used to or expected to be used to establish a consumer’s eligibility for credit, insurance, employment, or other purposes. Typically refers to the reports generated by Experian, Equifax, and TransUnion. But see “Specialty Consumer Reporting Agency.”.

True.  Yes, you can pay someone to remove an erroneous line item on your credit report – but the reality is that you can do that yourself for free.  We recommend that all consumers regularly monitor their reports for inaccurate entries that not only affect your credit rating, but can also be an indicator of a more serious problem such as identity theft.

True or False?  A credit repair company can remove damaging but accurate info from your credit report.

False. NO ONE can legally remove factually accurate information from your credit report – not even you.  What a company will be more than happy to do, however, is to take your money under the guise of credit repair” or credit rescue. Then, after what they will claim is a round or more of calls and letters, they will tell you that they’ve done everything that they can for you – and move on to their next target.

True or False?  A credit repair company can clear your credit report by issuing you a new EIN (Employee Identification Number) from the IRS.

False. A companies might tell you that it will effectively render your past negative credit history meaningless by obtaining a fresh, new EIN from the IRS.  The only problem with this killer strategy?  It’s illegal.  Yes, that’s right.  It’s a federal crime.

Moral of the story:  Check your credit report annually – which you can do at no cost at – and when some quack with a “credit repair” service asks you for your money?  Run – don’t walk – in the other direction.

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