GOT BAD DEBT AND LOOKING FOR A QUICK FIX?
YOU'VE SEEN the ads: "Credit problem? We can clean up your bad credit history 100 percent guaranteed.
The spots appear regularly in the newspapers and on TV, radio and the Internet. But are the companies behind the ads legitimate?
An ENQUIRER investigation looked into credit repair companies and the answer came back loud and clear: They're rip-offs!
"We have yet to see a legitimate credit repair company, Steve Baker of the U.S. government's Federal Trade Commission told the ENQUIRER.
Todd Mark, a spokesman for the nonprofit Consumer Credit Counseling Service in Atlanta, told the ENQUIRER: "Having a credit repair company fix your bad credit history is like searching for a tooth fairy. They're both wishful thinking.
And Paul S. Richard, executive director of the nonprofit Institute of Consumer Financial Education in San Diego, declared: "Credit repair the very name is a farce. No one can repair your credit history except you.
"Here in San Diego County there are probably 100 of these companies. In Los Angeles and Orange Counties there are another 300 to 400. I would have to say there are easily thousands if them across the country.
"Some charge as little as $25 a month to sign you up. Others charge anywhere from $500 to $1,500 up front. The ads will typically say they can clean up your bad credit history, remove bankruptcies, tax liens and anything else that might be on your file.
"People are so desperate to get out of a jam they're in that they'll grasp at almost anything they think will help them.
Baker at the FTC agreed: "People are looking for a magic bullet. Credit repair companies claim to provide one. Or they claim there's a loophole in the law, which only the know how to exploit. But there are no legal loopholes, no magic bullets.
Said Todd Mark: " Nobody can take negative information off your credit report. If, for example, you've got a bankruptcy on your file, it stays there for seven years. Only time will get it removed.
Paul Richard explained how the companies operate. "Once they've gotten your money, they the supposedly go about fixing your problem. They'll get a copy of your credit history and send it to you showing that all the negative stuff is gone. But the history is one they've created themselves. It's completely false.
"They don't send it to you straightaway. They'll stall you two or three months, pretending they're busy working on your case. It's all part of the scam.
"These folks will typically move into an area, work it for maybe three or four months, the fold up their tent and disappear with everyone's money, of course.
"You get your new' credit report, and you think: Oh boy, these guys did a great job.' Then you go out and try to get a loan for a new car and surprise, surprise! Up pops your old bad credit report.
"If you've been scammed report it to the FTC and we'll try to do our best to go after these folks. We have prosecuted cases and gotten the money back.
Some companies promise you a whole new credit report that doesn't have your bad information on it, said Baker. "What they do is go to the IRS and get and employer identification number that the IRS issues to small businesses for use when paying their taxes.
"They tell you the next time you apply for credit, don't use your Social Security number, but use the new number they've given you instead, and you'll have a brand new credit report.
"Don't do it! Misrepresenting who you are when applying for credit is a felony and people have been prosecuted for doing it.
There are, however, ways to fix your credit if there are mistakes on your credit report. First, get a copy of the report by calling the three credit reporting agencies. They each charge $9 and will send the report within a few weeks, according to Betsy Border of the FTC's Bureau of Consumer Protection.
The agencies and their numbers are: TransUnion (1-800-888-4213), Experian (1-888-397-3742) and Equifax (1-800-685-1111).
If you have a legitimate problem with your credit report, you have the rights under a federal law that requires the credit reporting agencies to keep your credit report accurate.
"If you have a problem, they'll ask you to document it. Border told The ENQUIRER. "So send them the documents and they'll investigate the error, and then they'll fix it. It doesn't cost you anything.
If the problem persists, call the FTC toll free at 1-877-FTCHELP and they will take up your case.