Tips & Topics - Debt
Repair Your Credit
If you have turned on the television in the past week, chances are you’ve seen an ad from a company offering to help you repair your credit – for a fee of course. Although a fee-based credit counseling service may be right for some, there are other steps you can take to begin improving your credit score immediately.The New York State Banking Department provides advice for getting out of debt safely, and provides a list of licensed credit counselors. In the meantime, there are steps you can take to immediately begin improving your credit score.
It is important to learn how to identify and avoid credit repair scams – which not only don’t improve your credit score, but leave you paying hundreds of dollars in fees.
The Federal Trade Commission (FTC) has identified the following warning signs to help you avoid a credit repair scam:
- The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
- The company doesn’t tell you your rights and what you can do for yourself for free.
- The company recommends that you do not contact any of the three major national credit reporting companies directly.
- The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
- The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
- The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
If you encounter any of these red flags, ask for a name and number which you can call back later, end the discussion promptly, and report the conversation including the contact information you received to the FTC at 1-877-382-4357 (1-877-FTC-HELP). Do not speak with a representative of that company again unless the FTC has assured you that the company is legitimate. For more information on identifying and avoiding credit repair scams, please visit the Federal Trade Commission's Facts for Consumers.