SCAMS BULLETIN Host Jay White is a volunteer attorney in San Mateo County, California.

August 15, 2020

CREDIT REPAIR SCAMS

A poor credit history can be a real hindrance for someone trying to recover from financial setbacks and being behind on bills. Scammers exploit that vulnerability with phony promises of a quick credit fix.

Shady companies will claim they can remove bankruptcies, liens and bad loans from your record, or even erase a bad credit history completely. They falsely claim to help you start over with a new credit identity that will make you look like a better risk to lenders.

Scammers will charge you a hefty amount for such dangerous advice.

The fact is that no one can remove bad information from your credit report if it is correct and timely. If a debt, bankruptcy or other item was accurately reported, it stays on your credit record for many years. Negative data can be deleted, however, if it is proven to be incorrect, or in some cases out of date.

Legitimate credit-repair companies can’t legally do anything you couldn’t do yourself for little or no cost at www.Annual Credit Report.com. That includes filing disputes with the major credit bureaus (Equifax, Experian and TransUnion) about negative items, in hopes it will show them to be wrong.

Crooks might also offer you an alternative nine-digit number called a CPN (credit privacy number or credit profile number), or direct you to falsely obtain an Employer Identification Number (EIN) from the Internal Revenue Service. Using one of those can get you in legal trouble.

Warning Signs

*A phony credit-repair company says it can get bad debt off your credit record, guarantee a better credit score or give you “a new credit identity.”

*The company tells you to give false information on loan applications.

*The company urges you to dispute information in your credit report that you know is accurate.

*The company tells you not to contact the credit bureaus yourself.

Do’s

*Do regularly check your credit history. You can get one free credit report a year from each of the three major credit bureaus at www.Annual Credit Report.com.

*Do dispute inaccurate information by contacting the credit bureaus directly.

*Do know your rights when it comes to credit repair. The federal Credit Repair Organization Act requires companies to give you a written contract that spells out the services it will perform, what you will pay and how long it will take to get results. Request a written contract and read the “‘fine print” before paying anything.

*Do remember that there is no legitimate quick fix for poor credit. Improving your record takes time and effort. It requires sticking to a personal plan to pay off your debts, says the Federal Trade Commission.

*Do consider contacting a reputable credit counseling organization instead of going to a shady credit-repair firm. Legitimate credit counselors can help you create a plan to manage your debts and develop a budget you can stick to.

Don’ts

*Don’t sign up with a credit-repair company that insists upon payment before it does any work on your case.

*Don’t trust companies that are secretive about their methods or claim they alone can fix your credit problems.

*Don’t follow instructions to lie on a credit or loan application. It’s a crime that could result in fines or a prison term

*Don’t follow advice to apply to the Internal Revenue Service for an EIN to use as a substitute for your Social Security number when you apply for credit. Obtaining an EIN under false pretenses is a crime

For guidance you can call the AARP Hotline 877-908-3360, and report to Federal Trade Commission www.FTC.gov

ATTRIBUTION: AARP