the Attorney General's office warns Avoid Credit Repair Scams
You see the ads everywhere -- on the Internet, TV and even telephone poles -- that bad credit can be erased. Consumers who are desperate for a car loan or home mortgage may pay hundreds of dollars to services that promise to help them reinvent themselves in the eyes of the credit bureau. You should be aware of these services to prevent wasting precious dollars on these so-called services.
There are several ways these credit repair scams claim they can help. For a fee they will offer to:
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Clean up your credit record. Only you can do this, and it takes time, patience and a personal repayment plan. No one else can speed up the process or do it for them.
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Offer you a Visa or MasterCard even if you have been turned down by banks. There have been incidents when a “900” number was provided, causing the individuals to spend $25 to $50, and they still did not receive a credit card.
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Show you how to apply for credit with a new tax ID number, usually an EIN (Employer Identification Number), used by businesses to report financial information to the government. This is called file segregation - creating a new credit file separate from your old, not-so-good credit report. Not only is it illegal to apply for an EIN under false pretenses, but, if the new number is obtained through the U.S. mail or by telephone, you may be charged with mail or wire fraud and face fines and/or jail.
In Ohio it is illegal for a company to charge an advance fee for these so-called services.
Attorney General Betty D. Montgomery offers this advice to improve your own credit rating:
- Obtain a “secured” credit card from a major bank and make the payments on time every time.
- Make sure any mistakes on your credit report are corrected. The credit bureau can tell you how, at no cost to you. However, there is nothing anyone can do about negative information that is accurate. It cannot be “erased.” Only timely payments for an extended period will help.
- Contact a local non-profit credit counseling service for assistance.
- If you realize you can't pay your monthly bills, contact your creditors immediately and arrange a payment plan.
Remember, there is nothing a credit repair service can do for you that you cannot do for yourself for free.
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