Credit Repair

Credit Repair

You might see or hear ads from companies that promise to "clean up"
or "erase" your bad credit and give you a fresh start. They charge
high fees, usually hundreds of dollars, but do not deliver on their
promises.

If you are thinking of paying someone to "repair" your credit,
remember this:

o Negative credit information can be reported for seven years (10
years for a bankruptcy).

o No one can require a credit bureau to remove accurate negative
information before that period is up.

o There are no "loopholes" or laws that credit repair companies
can use to get correct information off your credit report. o No
credit repair company can do anything you can't do for yourself.
(See the section on Credit Reporting, page 19.) o A "money-back
guarantee" does you no good if the company has gone out of business
or refuses to make good on its refund
promise.

o The only way to "repair" bad credit is by good credit
practices over a period of time.

Some credit repair companies promise not just to clean up your
existing credit record, but to help you establish a whole new
credit identity. Remember, it is illegal to make false
statements on a credit application or to misrepresent your Social
Security Number. If you use such methods, you could face fines or
even prison. Beware of any company or method that:

o encourages you to omit or lie about bad credit experience when
you apply for new credit;


o tells you to use a new name or address or a new number, for
example, an Employer Identification Number (EIN), in place of your
Social Security Number in applying for credit; or

o says it is legal to establish a new credit identity.

You can rebuild your good credit by handling credit responsibly.
You might want to contact a Consumer Credit Counseling Service
(CCCS) office. This is a non-profit organization that will provide
help at little or no cost to you. For a CCCS office in your area,
call 1 (800) 388-CCCS.

Credit Billing and Disputes

The Fair Credit Billing Act applies to credit card and charge
accounts and to overdraft checking. It can be used for:

o billing errors;

o unauthorized use of your account;

o goods or services charged to your account, but not received or
not provided as promised; and

o charges for which you request an explanation or written proof of
purchase.

Protect Your Rights

o Write to the creditor or card issuer within 60 days after the
first bill containing the disputed charge is mailed to you. (Even
if more than 60 days have passed since you were billed for the
item, you still might be able to dispute the charge if you only
recently found out about the problem.)

o Send your letter to the address provided on the bill; do not
send the letter with your payment.

o In your letter, give your name and account number, the date and
amount of the charge disputed, and a complete explanation of why
you are disputing the charge. Be specific.

o To be sure your letter is received, and so you will have a
record, you might wish to send it by certified mail, with a return
receipt requested.

If you follow these requirements, the creditor or card issuer must
acknowledge your letter in writing within 30 days after it is
received and conduct an investigation within 90 days.

While the bill is being disputed and investigated, you need not pay
the amount in dispute. The creditor or card issuer may not take
action to collect the disputed amount, including reporting the
amount as delinquent, and may not close or restrict your account.

If there was an error or you do not owe the amount, the creditor or
card issuer must credit your account and remove any finance charges
or late fees relating to the amount not owed. For any amount still
owed, you have the right to an explanation and copies of documents
proving you owe the money.

If the bill is correct, you must be told in writing what you owe
and why. You will owe the amount disputed, plus any finance
charges. You may ask for copies of relevant documents.

Debt Collection

The Fair Debt Collection Practices Act applies to those who collect
debts owed to creditors for personal, family and
household debts, including car loans, mortgages, charge accounts
and money owed for medical bills. A debt collector may not: o
contact you at unreasonable times or places, for example, before 8
a.m. or after 9 p.m., unless you agree, or at work if you tell the
debt collector your employer disapproves;

o contact you after you write a letter to the collection agency
telling them to stop, except to notify you if the debt collector or
creditor intends to take some specific action;

o contact your friends, relatives, employer or others, except to
find out where you live and work or tell such people that you owe
money;

o harass you by, for example, threats of harm to you or your
reputation, use of profane language or repeated telephone calls;
o make any false statement, including that you will be arrested;
and

o threaten to have money deducted from your paycheck or sue you
unless the collection agency or creditor actually intends to do so,
and it is legal to do so.

If you are contacted by a debt collector, you have a right to a
written notice, sent within five days after you are first
contacted, telling you:

o the amount owed;

o the name of the creditor; and

o what action to take if you believe you don't owe the money. If
you believe you do not owe the money or don't owe the amount
claimed, contact the creditor in writing and send a copy to the
debt collection agency with a letter telling them not to contact
you.


If you do owe the money or part of it, contact the creditor to
arrange for payment.

Equal Credit Opportunity Act

The Equal Credit Opportunity Act guarantees you equal rights in
dealing with anyone who regularly offers credit, including banks,
finance companies, stores, credit card companies and credit unions.
A creditor is someone to whom you owe money. When you apply for
credit, a creditor may not:

o ask about or consider your sex, race, national origin or
religion;

o ask about your marital status or your spouse, unless you are
applying for a joint account or relying on your spouse's income or
you live in a community property state (Arizona, California, Idaho,
Louisiana, Nevada, New Mexico, Texas and Washington); o ask about
your plans to have or raise children;

o refuse to consider reliable public assistance income or
regularly received alimony or child support; and

o discount or refuse to consider income because of your sex or
marital status or because it is from part-time work or retirement
benefits.

You have the right to:

o have credit in your birth name, your first name and your
spouse's last name, or your first name and a combined last name;
o have a co-signer other than your spouse if one is necessary;
o keep your own accounts after you change your name or marital
status or retire, unless the creditor has evidence you are unable
or unwilling to pay;

o know why a credit application is rejected; the creditor must
give you the specific reasons or tell you of your right to find out
the reasons if you ask within 60 days; and

o have accounts shared with your spouse reported in both your
names.