G. Avoid Credit Repair Clinics
You’ve probably seen ads for companies that claim they can fix your credit, qualify you for a loan or
get you a credit card. Their pitches are tempting, especially if your credit is bad and you desperately
want to buy a new car or house.
Avoid these outfits. Many of their practices are fraudulent, deceptive and even illegal. Some have
been caught stealing the credit files or Social Security numbers of people who are under 18, have
died or live in out-of-the-way places like Guam or the U.S. Virgin Islands, and substituting these for
the files of people with poor credit histories.
Other credit clinics break into credit bureau computers and change or erase bad credit files. Still others suggest that you create a new identity by applying for an IRS Employer Identification number
(EIN), a nine-digit number that resembles a Social Security number, and use it instead of your Social
Security number. Not only is this illegal, but by using an EIN, you won’t earn Social Security benefits.
These illegal methods are just the tip of the iceberg. Credit repair clinics devise new schemes as
often as consumer protection agencies catch onto their previous ones.
Even assuming that a credit repair company is legitimate, don’t listen to its come-ons. These
companies can’t do anything for you that you can’t do yourself. What they will do, however, is charge
you between $250 and $5,000 for their unnecessary services. Here’s what credit repair clinics claim to be able to do for you: Remove incorrect information from your credit file. You can do that yourself under the Fair Credit Reporting Act. See Chapter 4.
Remove correct, but negative, information from your credit file. Negative items in your credit
file can legally stay there for seven or ten years, as long as they are correct. No one can wave a wand
and make them go away. One tactic of credit repair services is to try to take advantage of the law
requiring credit bureaus to verify information if the customer disputes it. Credit repair clinics do this by challenging every item in a credit file—negative, positive or neutral—with the hope of overwhelming the credit bureau into removing information without verifying it. Credit bureaus are aware of this tactic and often dismiss these challenges on the ground that they are frivolous, a right credit bureaus have under the Fair Credit Reporting Act. You are better off getting your file and selectively challenging the outdated, incorrect and ambiguous items.
Even if the credit bureau removes information that a credit bureau had the right to include in your file, it’s no doubt only a temporary removal. Most correct information reappears after 30–60 days,
when the creditor that first reported the information to the credit bureaus re-reports it.
Taken From : Credit Repair by Attorneys Robin Leonard and Deanne Loonin
