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Credit Repair Tips
The Credit Repair
Organizations Act
By law, credit repair organizations must give you a copy of the "Consumer
Credit File Rights Under State and Federal Law" before you sign a contract.
They also must give you a written contract that spells out your rights and
obligations. Read these documents before signing the contract. The law contains
specific protections for you. For example, a credit repair company cannot:
- make false claims about
their services;
- charge you until they have
completed the promised services; or
- perform any services until
they have your signature on a written contract and have completed a
three-day waiting period. During this time, you can cancel the contract
without paying any fees.
Your contract must specify:
- the payment terms for
services, including their total cost;
- a detailed description of
the services to be performed;
- how long it will take to
achieve the results;
- any guarantees they offer;
and
- the company's name and
business address.
Have You Been Victimized?
Many states have laws strictly regulating credit repair companies. States may be
helpful if you've lost money to credit repair scams.
If you've had a problem with a credit repair company, don't be embarrassed to
report them. While you may fear that contacting the government will only make
your problems worse, that's not true. Laws are in place to protect you. Contact
your local consumer affairs office or your state attorney general (AG). Many AGs
have toll-free consumer hotlines. Check with your local directory assistance.
Need Help? Don't Despair
Just because you have a poor credit report doesn't mean you won't be able to
get credit. Creditors set their own credit-granting standards and not all of
them look at your credit history the same way. Some may look only at more recent
years to evaluate you for credit, and they may grant credit if your bill-paying
history has improved. It may be worthwhile to contact creditors informally to
discuss their credit standards.
If you can't resolve your credit problems yourself or you need additional help,
you may want to contact a credit counseling service. There are non-profit
organizations in every state that counsel consumers in debt. Counselors try to
arrange repayment plans that are acceptable to you and your creditors. They also
can help you set up a realistic budget. These counseling services are offered at
little or no cost to consumers. You can find the office nearest you by checking
the white pages of your telephone directory.
In addition, nonprofit counseling programs sometimes are operated by
universities, military bases, credit unions, and housing authorities. They're
also likely to charge little or nothing for their services. Or, you can check
with your local bank or consumer protection office to see if it has a list of
reputable, low-cost financial counseling services.
Do-It-Yourself Check-Up
Even if you don't have a poor credit history, it's a good idea to conduct your
own credit check-up, especially if you're planning a major purchase, such as a
home or car. Checking in advance on the accuracy of the information in your
credit report could speed the credit-granting process.
You're entitled to one free report a year if you can prove that (1) you're
unemployed and plan to look for a job with 60 days, (2) you're on welfare, or
(3) your report is inaccurate because of fraud. Otherwise, a credit bureau may
charge you up to $9.00 for a copy of your report.
Credit bureaus usually are listed in the yellow pages of your telephone book
under "credit reporting agencies." Three large national credit bureaus
supply most credit reports: Equifax, Experian and Trans Union. You may want to
contact each of them for a copy of your report.
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