You’re overwhelmed by debt and every other message on your answering machine is from a collection department. You’re not sure how to deal with your bills, and the thought of bankruptcy has even crossed your mind. Suddenly, you see an advertisement from a credit repair company claiming that they can wipe away your bad credit record and give you a new credit identity. Or, they promise to remove negative items from your credit report and boost your credit score. For their “expertise” they will, of course, charge you a nominal fee. If this sounds appealing to you, walk quickly in the other direction because this type of “credit repair” might only make matters worse for you.
One common tactic employed by these credit repair companies involves disputing every negative item on your credit report. These credit repair scam companies will assure you that, while you dispute these items, the item will be temporarily removed while the credit bureaus verify its accuracy. “Credit fixing” tactics such as this were fairly commonplace twenty years ago, but in the age of computers, it doesn’t usually work that way. Accurate information can be verified within hours. If you dispute accurate items, you run the risk of your dispute being flagged as “frivolous.” Even in the unlikely event that your credit is “fixed” and the item is dropped, if the negative item is accurate, your creditor can simply report the same item to the credit bureaus again next month– after you’ve already paid the credit report scam company for “repairing” your credit.
Some companies will suggest that you set up a new credit identity for yourself by applying for an EIN (Employee Identification Number) and using that number in your credit application instead of your social security number. Again, this is a bad idea. For starters, it’s against the law. If you follow this advice, you are committing fraud and can be prosecuted under federal law for misrepresenting yourself as an applicant for credit or a loan. Second of all, if you are 40 years old and your credit report was opened a week ago, it is not hard for a bank to spot this sort of fraud immediately.
The truth is, if you simply contact your creditors yourself, make arrangements to make payments you can afford, you can accomplish more on your own than you can with these sort of credit report scams. Unfortunately, when negative information on your credit is accurate, the only remedy is patience and the passage of time. Learn how to build a good credit history.