Excerpted from the Do-It-Yourself Credit File Correction Guide
Written by Paul Richard and published by the ICFE
The Federal Trade Commission (FTC) recently announced action being taken in 15 different cases against credit repair firms that still are bilking consumers out of millions of dollars annually. It also announced a new consumer education program. Here are some facts on credit repair.
1.Accurate and timely information cannot be removed from your credit report, even if you have paid off a once delinquent debt. The fact that it is paid off is to your credit, however, the fact that the account was once delinquent is also true and can remain on your credit files from up to seven years.
2.Credit repair clinics can't do anything to improve your credit report that you can't do for yourself, at little or no cost, (especially if you utilize The Institute of Consumer Financial Education's Do-It-Yourself Credit File Correction Guide - $12 includes postage).
3.Avoid companies that want you to pay for credit repair services BEFORE they provide any services.
4.It is illegal for telemarketers who offer credit repair services to request payment until six months after they have delivered the services.
No one can legally remove accurate and timely negative information from a credit report. The law, does however allow consumers to request an investigation or reinvestigation of the facts and information in your credit file that you dispute as inaccurate or incomplete. There is no charge for this investigation.
Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. You may see their advertisements in the newspapers, on TV and on the Internet. You may also hear them on radio or even get fliers in the mail. You may receive a call from telemarketers offering their credit repair services. They all make the same (false) claims:
Credit problems? No problem!
We can erase your bad credit 100% guaranteed.
Create a new credit identity - legally.
We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever.
Every day, companies nationwide 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.
The truth is, says the FTC, is that they can't deliver on their promises and claims. 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, many credit repair companies simply vanish with consumer's money.
If you decide to respond to a credit repair offer, beware of companies that:
1.Want you to pay for credit repair services BEFORE any services are provided;
2.Do not tell you your legal rights and what you can do yourself for free;
3.Recommend that you do not contact a credit bureau directly; or
4.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.
Bankruptcy information can be reported for up to ten years
Information reported because of an application for a job with a salary of more than $20,000 has no time limit
Information reported because of an application for more than $50,000 worth of credit line or life insurance has no time limitation
Default information concerning a US Government insured or guaranteed loan can be reported for seven years after certain guarantor actions
Information concerning a lawsuit or a judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer.