Credit Repair Services: Getting the Best Help to Fix Your Credit Score
Credit Repair Service - Beware These Big No-No’s
Is your financial credibility tarnished by bad credit reputation? Are your chances of getting assistance from financial institutions and obtaining loan approval being compromised because of your present credit status? The fact is more and more banks and lending companies are implementing stricter guidelines for loan transactions; and most people are starting to realize that having a good credit standing is essentially helpful in this time of wobbly economy. Thus, many are struggling with the predicament of improving or restoring credit viability. You can either do it yourself or seek the help of credit repair service companies.
Authentic credit repair service companies with sufficient knowledge in fixing and improving damaged credit reputation do exist. However, you have to be watchful about some significant aspects of credit repair, as they may present potential drawbacks. These are the aspects that usually give the indication if you are dealing with a deceptive company and are about to be hoodwinked.
Removal of Legitimate Negative Credit Information
Fair Credit Reporting Act (FCRA) rules that only stale, unconfirmed, misleading and inaccurate items can be disputed or removed from your credit report; no individual or company can legally eliminate or dispute recent items that are clearly yours and show your veritable credit history. So if a credit repair service company promises “total credit report clean-up” and guarantees removal of ALL negative information (including accurate and most recent items); it is very likely that this company is a fraud. There is no legal way for any organization to remove valid negative entries on your report; thus, any promise that purports otherwise is an absolute lie and may involve illegal means, if so pursued.
Defaulting Payment and/or Payment through "Trust Account"
Think twice (or even more); when a company advises you to simply elude paying your debts and other bills. It could jeopardize whatever chance you may have to fix your credit; to the extent of completely messing up your financial credibility with more than just a few collection notations. Moreover, you're giving the IRS reason to run after you; working on the principle that if you actually owed the money, those debt balances are deemed to be "Income". The prudent way is to haggle for feasible payment schemes to clear those outstanding balances and completely get rid of the negative items from your report.
Another thing you should be skeptical about is when the credit repair service company suggests they make payments on your behalf. The way it works, you have to issue a check every month that ostensibly goes to a "trust" account, from where they would supposedly get the funds to settle your financial obligations. More often than not, they would lag behind on the payments (if not completely fail to pay), which would result to your credit history being checkered with 30-day “Late” remarks, and just make your credit rating go down some more.
File Segregation/New Identity
In the strictest sense, the key target of credit repair service is to reduce the encumbrances of debt troubles and augment your credit rating; not to switch your credit history. Amendment, if any, is limited to the removal or correction of erroneous items. Some dubious providers may offer the so-called file segregation solution; a process that entails creating a new identity to obscure negative information on your credit record. Among the tricks employed to give rise to the new identity include making use of fake (or somebody else's) Social Security Numbers, acquiring Employer Identification Number (EIN) and presenting it as identity proof instead of SSN; providing phony personal information, and many other similar stunts; which are all against the law. Be warned that with such illegal moves, you could face hefty fines; or worse, you could land in jail for several counts of felony or civil fraud, at the very least.
In dire situations, it is perhaps understandable how people can get so fretful about money issues. The sad thing is there are unscrupulous people that abuse this desperation to swindle consumers. Don't get tricked by promises of extraordinary results that sound too far-fetched to be plausible. In some cases, any incredible transformations that they may be able bring about are often short-lived, and would most assuredly re-appear after a while. Here are some helpful "Credit Repair FAQ."
Authentic credit repair service companies with sufficient knowledge in fixing and improving damaged credit reputation do exist. However, you have to be watchful about some significant aspects of credit repair, as they may present potential drawbacks. These are the aspects that usually give the indication if you are dealing with a deceptive company and are about to be hoodwinked.
Removal of Legitimate Negative Credit Information
Fair Credit Reporting Act (FCRA) rules that only stale, unconfirmed, misleading and inaccurate items can be disputed or removed from your credit report; no individual or company can legally eliminate or dispute recent items that are clearly yours and show your veritable credit history. So if a credit repair service company promises “total credit report clean-up” and guarantees removal of ALL negative information (including accurate and most recent items); it is very likely that this company is a fraud. There is no legal way for any organization to remove valid negative entries on your report; thus, any promise that purports otherwise is an absolute lie and may involve illegal means, if so pursued.
Defaulting Payment and/or Payment through "Trust Account"
Think twice (or even more); when a company advises you to simply elude paying your debts and other bills. It could jeopardize whatever chance you may have to fix your credit; to the extent of completely messing up your financial credibility with more than just a few collection notations. Moreover, you're giving the IRS reason to run after you; working on the principle that if you actually owed the money, those debt balances are deemed to be "Income". The prudent way is to haggle for feasible payment schemes to clear those outstanding balances and completely get rid of the negative items from your report.
Another thing you should be skeptical about is when the credit repair service company suggests they make payments on your behalf. The way it works, you have to issue a check every month that ostensibly goes to a "trust" account, from where they would supposedly get the funds to settle your financial obligations. More often than not, they would lag behind on the payments (if not completely fail to pay), which would result to your credit history being checkered with 30-day “Late” remarks, and just make your credit rating go down some more.
File Segregation/New Identity
In the strictest sense, the key target of credit repair service is to reduce the encumbrances of debt troubles and augment your credit rating; not to switch your credit history. Amendment, if any, is limited to the removal or correction of erroneous items. Some dubious providers may offer the so-called file segregation solution; a process that entails creating a new identity to obscure negative information on your credit record. Among the tricks employed to give rise to the new identity include making use of fake (or somebody else's) Social Security Numbers, acquiring Employer Identification Number (EIN) and presenting it as identity proof instead of SSN; providing phony personal information, and many other similar stunts; which are all against the law. Be warned that with such illegal moves, you could face hefty fines; or worse, you could land in jail for several counts of felony or civil fraud, at the very least.
In dire situations, it is perhaps understandable how people can get so fretful about money issues. The sad thing is there are unscrupulous people that abuse this desperation to swindle consumers. Don't get tricked by promises of extraordinary results that sound too far-fetched to be plausible. In some cases, any incredible transformations that they may be able bring about are often short-lived, and would most assuredly re-appear after a while. Here are some helpful "Credit Repair FAQ."
