The Truth About Credit Repair Schemes

The internet and TV are full of schemes that promise credit repair by "experts" who will remove all negative issues from your credit report so that your credit rating remains good and you can use this for loan modification and to stall foreclosure. They sound tempting and the consumer feels that he has nothing to lose so why not.

The fact is that even if the advertisements promise that everything that will be done is legal, you are walking into a trap. These offers are usually illegal and will cause you nothing but grief. It is illegal for anyone to collect payment up front for credit repair services. It is also against the law to make offers of credit repair that can not be done within the legal framework, such as removing foreclosure information from a credit report. Yes, credit repair is possible but only within the following parameters:

• Only inaccurate or out dated information can be removed from a credit report. Hiding it is not legal.
• Companies that say they can remove all negative information from your credit report are misleading you. Stay away from them.
• No reliable company will tell you not to contact the credit report companies directly - if they do, they are hiding something.
• Any company that requires you to pay them money in advance are in breach of the law.
• In California all companies must be registered with the Secretary of State to conduct any business related to credit services. Any company that is not is operating outside the law.
• Never listen to a company that advises you to apply for a new Employer Identification Number so you can create a "new" credit report. This is illegal and leaves you open to prosecution.