If you suffer from poor credit, you've probably seen advertisements for credit repair services. Many ads for credit repair services claim to be able to remove bankruptcies, create new credit identities, and even erase bad credit.

Beware! Many of these credit repair companies exist only to cheat money out of their customers. Many people have paid hundreds of dollars in fees, only to find that these credit repair companies simply vanish because they can't deliver what they have promised. Don't be fooled, the only real way to improve your credit report is with time, effort, and a good payment history.

But if you decide to try out a credit repair service, there are certain warning signs you should look for to decide if the company is legitimate. A credit repair service should not want you to pay for credit repair services before any services are provided. Another warning sign is if a credit repair service recommends that you not contact the credit bureau directly or refuses to answer questions about your legal rights as a debtor.

Some phony credit repair services will advise you to creat a new credit identity by applying for an Employer Identification Number to use instead of your Social Security Number. If you follow this illegal advice you may be commiting fraud, and find yourself facing prosecution. It's a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, or to obtain an Employer Identification Number from the IRS under false pretenses.

While no one can legally remove accurate and timely negative information from a credit report, the good news is that the law does allow you to dispute information on your credit report that is inaccurate or incomplete. According to the Fair Credit Reporting Act, you can dispute mistakes or outdated items for at absolutely no cost to you. Just ask the credit reporting agency for a dispute form and/or submit your dispute in writing. Include supporting documentation, clearly identify each item in your report that you dispute, explain why you dispute the information, and request a investigation be done. Make sure you remember to keep a copy of the dispute for your records. If the new investigation reveals an error, you can ask that a corrected version of the report be sent to anyone who received your report within the past six months. If the reinvestigation does not resolve your dispute, you can have the credit bureau include your version of the dispute in your credit report.

Luckily, many states have laws regulating credit repair companies. So, if you believe you have been cheated by a fraudulent credit repair service, don't hesitate to report the company to your local consumer affairs office or your state attorney general.



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