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Can You Clear Your Past Faults With Credit Repair Services? |
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Once you fall prey to the credit repair services offer and pay the hefty fees involved to clean up your record, it will be extremely difficult get out of the trap laid out by these so called credit repair services. Consumers with bad credit who respond to these advertisements probably do not even inquire about the credibility of these firms. Several government agencies and state attorneys general recently sued 43 firms for operating fake credit-repair services. Over the past several years credit repair services have gained a bad reputation due to unscrupulous companies stating that they can clear your credit report. Stating that they would help in clearing your report is not the problem, but stating that they could give you a clean credit report or a new credit file is. It is against the law to create a new credit file using a federal taxpayer identification number, or any number other than your own social security number.
Credit repair services often claim that they can get you a credit card, regardless of your credit history. In fact, these companies do not always honor their guarantee. Sometimes, they'll just take your money and run away. You will not get any credit, regardless of the promises they made. If they get you a card at all, it often will be a secured bank credit card, with high up-front application fees, that would require you to deposit and keep a large amount of cash in a savings account, or a card that only allows you to buy items in a catalogue from a business that you probably never heard of. For a hefty fee of up to $200, credit report services tell consumers how to obtain 9-digit numbers from the government to use in place of original social security numbers. One is the employer identification number that the IRS assigns to businesses. The firms tell consumers to use these numbers to open bank accounts and apply for credit, ostensibly to establish a new credit history. The scheme, called file segregation, is in fact illegal. It is a crime to misrepresent your Social Security number or make false claims on a credit application. Till now, law enforcers have acted only against the companies, but individuals can be prosecuted, too. Credit repair services often make illegal or false claims to lure consumers. They target people with poor credit histories, particularly those with recent bankruptcies who may have difficulty getting new credit or loans. But under no circumstances can consumers erase accurate, negative information from their credit files. Rebuilding a good credit reputation takes time and there's nothing any credit-repair services can do for you that you can't do for yourself to recreate your good credit report. Some credit repair services try to get people a credit card by having them apply using financial information of other people with good credit histories. It is a criminal act to apply for credit under someone else's name. One must refrain from doing business with any of these companies. Law enforcement agencies have shut down many credit repair services, but it is difficult to stop a fraudulent credit repair service unless and until consumers complain about it. Therefore, as an aware consumer, one has to be careful about responding to credit repair ads. Also one has to make sure to complain against a credit repair services company that is taking advantage of people. The Credit Repair Organizations Act prohibits organizations from providing false claims regarding credit repair and restricts such companies from charging any fees until services are carried out. Companies claim that they can fix your bad credit and probably can help you buy a new car, keep the debt collectors at bay and give you freedom from your past debts. For someone who suffers from a bad or poor credit rating, these headlines are certainly an appealing offer. As per the law, it is mandatory for any credit repair services company to inform consumers of their legal rights in a written contract. This contract should include notification of all services performed, the time it will take to execute these services, total cost, any guarantees, and an explanation that consumers have three days to cancel the service at no charge. Therefore, the only way to rebuild your credit record is to make a conscious and concrete effort to pay off debts. Also, one must keep in mind that there is nothing a credit repair services can do legally that you can't do for yourself to rectify your past mistakes. |
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