Watch out for credit repair companies.
The Federal Trade Commission warns that there is no magic wand. No one can remove accurate negative information from your credit report except Father Time. Consumer reporting companies can keep accurate negative information on your credit report for 7 years, and bankruptcy information on it for 10 years.
That fact does not stop credit repair companies from making extravagant claims about raising your credit score. The truth is that for the cost of a few stamps the consumer can do the same thing that a credit repair company will charge for. Look for these red flags when considering a credit repair company:
• The company wants money up front for their services. Under the Credit Repair Organizations Act of 1996, you cannot be required to pay until the promised services have been completed.
• The company does not tell you your rights and what you can for yourself for free. You already have the right, for instance, to request an investigation of information in your file if you think it’s inaccurate.
• The company tells you they can get rid of negative information in your file even if it is accurate and current.
• The company advises you to apply for an Employer Identification Number to use instead of your Social Security number to invent a “new” identity. This is extremely dangerous and you could thereby be guilty of a federal crime.