growth of the credit industry has been explosive as is the huge
amounts of money scammed from consumers through various 'credit
repair' schemes. Still, an alarming number of credit-starved
Americans are utilizing the services of these so called 'credit
doctors,' despite federal and state laws rendering them essentially
useless, in hopes of renewing their ability to, once again, engage
in credit-based spending.
Consumers who paid in
advance for 'credit repair' services have nowhere to turn for help,
when they get less than advertised or expected results, because
many of the companies were bogus and no longer exist," said
Paul S. Richard - Executive Director of the nonprofit Institute
of Consumer Financial Education (ICFE) based in San Diego, CA. The
ICFE is dedicated to helping consumers become better spenders, regular
savers and wise users of credit. It also helps people avoid the
credit repair scams and publishes, in English and Spanish, a Do-It-Yourself
Credit File Correction Guide. It is a low cost ($10) help for
consumer to correct legitimate mistakes they discover on their credit
"A good trend is
more consumers becoming aware of the importance of looking at their
credit files, especially in light of the dramatic increase in identity
thefts. Credit report reviews also educate on both the importance
of credit ratings and protecting against identity theft. The reviews
should be conducted annually for the average credit user, however,
for active credit users - those paying on three or more credit cards
and/or loans per month - their credit report should be reviewed
semiannually," the ICFE advises.
If you need assistance
in reviewing and/or understanding your credit report, seek out a
"Certified Consumer Interviewer on the Fair Credit Reporting
Act." These individuals are trained, tested and certified by
the Consumer Data Industries Association (CDIA), formerly known
as Associated Credit Bureaus. More often than not, you will find
such an individual at the local offices of an accredited, nonprofit
consumer credit counseling service (CCCS). Many CCCS offices make
a credit report review service available year round for a small
Consumers, and even
some credit / debt counselors, however, are still very uncertain
about what credit repair is and is not.
Credit repair IS more
accurately called "credit (file) correction. Credit file correction
is how you get someone else's information or accounts off of your
own file, or how a reported account may be disputed, if the information
is incorrect, and it is the method consumers use to communicate
errors and other misinformation reported to the CRA's. Only mistakes
and misinformation, i.e. someone else's account, a paid account
reported as unpaid, etc. may be corrected on credit files. Negative
items, including matters of public record such as a bankruptcy filing,
a wage garnishment, tax liens, or other judgments, if they are true
and correct, may remain on one's credit record until the statute
of limitations expires, which is usually seven years, ten years
if a bankruptcy. Other blemishes such as slow payments, delinquencies,
missed payments, bounced checks, over limit fees and collection
attempts reported therein, if they are true and correct, may also
remain until the statute of limitations expires.
The do-it-yourself approach
to correcting credit file mistakes is the best and most cost effective
Credit repair is NOT,
however, obtaining a new "identity" or a "federal
employer identification (FEI) number" to use in place of a
Social Security on new credit applications. Credit repair is NOT
sending mass mailings to credit reporting agencies disputing every
negative item, including slow payments, missed payments, wage garnishments,
tax liens, collection attempts and defaults, on one's credit record,
hoping that so many letters are received at one time that some credit
reporting agencies (CRAs) will miss the deadline to respond and
the negatives will be removed by default. Credit repair is NOT deleting
unpaid balancesor debts negotiated downwards (a/k/a charge-offs)
or paid liens. Credit repair is NOT a means for obtaining new or
additional credit, based on false or misleading information. Most
credit repair activities, as described in this paragraph are NOT
legal in most states.
It is negative items
like late pays, bounced checks and missed payments, that most consumers,
who fall prey to 'credit repair doctors,' desperately want to get
off their credit reports. Unless there is a mistake, these negative
items may be disputed, however, if found to be correct, they will
For more information
about the credit file correction process and a listing of the consumer's
credit rights, or to learn more about ICFE's popular best selling
Credit File Correction Guide", (available in English and
Spanish) or to download credit file requests forms, please visit
the ICFE's Web page at: http://www.financial-education-icfe.org.
To receive the same
information by mail, please send $1 and a self-addressed, 60 cent
stamped envelope to: ICFE Credit File Request Forms
PO Box 34070
San Diego, CA 92163.
About the ICFE:
The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation). The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely.
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.
The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org). CASDRAP disbanded in 2010, shortly after the web site project was completed. In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.
The ICFE is also an on-line help for consumers who spend too much. ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.
Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org. Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G, a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.