By Michael Rupured
University of Georgia
Only serious effort, time and a good debt-repayment plan can help repair bad credit. Unfortunately, many companies want people to believe otherwise.
These companies make false claims about credit repair. People believe these claims, pay the companies money and find themselves with the same bad credit.
In many cases, the credit-repair company may encourage you to commit a crime by asking you to create a federal ID number. Basically, they're asking you to create a new identity, which is illegal.
Targeting desperate people
Credit-repair companies target people who desperately want a car, a house, insurance or even a job but have bad credit. These people are lured by ads claiming, "We can erase your bad credit -- 100-percent guaranteed."
They wrongly claim they can erase information from your credit report.
If you feel you need to seek repair for your bad credit, keep in mind:
- Credit-repair companies are not allowed to make false claims about their services.
- They can't charge you until services are complete.
- They can't perform any services until they have your signature and have completed a three-day waiting period.
- Inaccurate information can be removed at no cost by reporting the error to the credit-reporting agency.
- It's illegal to create a new identity to get credit.
- Sometimes self-help may be the best option.
There is a simple, free solution
The secret to improving your credit rating is simple and free. First, pay your bills on time. Next, report discrepancies to the credit bureau, reduce the amount you owe and close unused lines of credit.
And remember to get a copy of your credit report at least once a year. You can do so by contacting the three national credit bureaus: Equifax, 1-800-685-1111; Experian, 1-888-397-3742; and Transunion, 1-800-916-8800.
In some states, including Georgia, you can request two free reports a year from each bureau.