G. Avoid Credit Repair Clinics (2)
Get outstanding debt balances and court judgments removed from your credit file. Credit repair clinics often advise debtors to pay outstanding debts if the creditor agrees to remove the negative
information from your credit file. This is certainly a negotiation tactic you want to consider (see
Chapter 3, Section C), but you don’t need to pay a credit repair clinic for this advice.
Get a major credit card. Credit repair clinics can give you a list of banks that offer secured credit cards. While this information is helpful in rebuilding credit, it’s not worth hundreds or thousands of dollars you can get a list yourself for little or nothing.
(See Section C.4, above.)
The federal Credit Repair Organizations Act (15 U.S.C. §§1679–1679j) regulates for-profit credit repair clinics (the text is included in Appendix 2). Some dubious credit repair clinics have tried to get
around these regulations by setting themselves up as nonprofits, but they still take your money and
provide poor results—or do nothing for you that you couldn’t do for yourself.
Under the federal law, a credit repair clinic must:
• inform you of your rights under the Fair Credit Reporting Act
• accurately represent what it can and cannot do
• not collect any money until all promised services are performed
• provide a written contract, and • let you cancel the contract within three days of signing.
Any lawsuit you bring against a credit repair clinic for violation of this law must be filed within five years of the violation. A court may award actual damages, punitive damages (meant to punish) and
attorneys’ fees.
Taken From : Credit Repair by Attorneys Robin Leonard and Deanne Loonin
