Credit Report Repair
Why Self-credit Report Fixes are your Best Option.
Did you know?- It’s illegal to change your social security number (SIN) in order to start anew with clean credit?
- It’s illegal to dispute items on your credit report unless they are errors.
- You can be charged for misleading credit agencies or falsifying credit information.
When you hear statements like:
“We’ll erase your bad credit!”
“We’ll erase your bad credit identity — and give you a good credit rating.”
“We can erase bankruptcies, repossessions, liens, and bad loans from your credit file -100%!”
It’s a scam! Trust me, any credit repair company that advertises these types of claims on television, in the newspaper or on the Internet is bogus – and what’s worth breaking the law. If you get involved with a company like this you are risking destroying your credit rating forever – and worse criminal fraud charges. No amount of money can erase a bad credit record; however time and a conscious effort on your part to right your bad credit wrongs will improve your creditworthiness in the eyes of credit bureaus and potential lenders.
If you are solicited by bogus credit repair companies – using the tactics I’ve outlined above - save yourself the hundreds or thousands of dollars in fees they will charge you and put that money towards rebuilding your credit in a legit manner.
How do you spot a credit repair scam?
Look for these tell-tale signs of a credit repair hoax:
If the company demands a fee upfront before even providing any credit repair services – they are a scam!
If the company doesn’t start with credit counseling that informs you of your legal rights – such as your right to a free credit report – they are a scam!
If the so-called credit repair company tries to deter you from contacting the credit bureaus directly – they are a scam!
If the so-called credit fix it company recommend that you apply for a employer identification number (EIN) and to start using that to get credit cards and loans instead of using your social insurance number (SIN) in order to start building a new credit history – they are a scam! Additionally, these actions could land you with criminal fraud charges.
If the company tells you to dispute all of the negative credit information – including the true information – on your credit report – they are a scam, and your actions could lead you to criminal prosecution.
Just so we’re clear, it’s illegal to do any of the following:
- Apply for a loan or credit card via mail, telephone or internet with a new social insurance number (SIN).
- To apply for a loan or credit card using a new identity via an employer identification number (EIN).
In order to rebuild your credit rating in the eyes of lenders for good, you want to stick to legal methods. You want to prove to lenders that you are a responsible borrower and part of doing that is being honest and forthright when it comes to your credit history. Legal ways to fix your credit rating – that won’t get you into deep water with lenders are:
Identifying errors on your credit report – Get a free copy of your credit report (to find out how read our article How to Get a Free Credit Report) and examine it for any errors that might exist. That means any accounts that are indicated as still open that you have actually closed or any loans or payments that you didn’t make. If you find an error on your credit report you should find documented proof and notify the account holder immediately of the error to dispute it. Once the error has been identified and fixed you should notify the credit agencies immediately to ensure it is removed from your credit report.
Negotiate with lenders – I like to call this form of negotiation, a "goodwill negotiation”, meaning that you’ve already paid the account off and you are approaching the lender to ask them kindly to remove it from your credit report – now that it’s been paid off in full. There is no designated amount of time (according to law) for negative items to stay on your credit report. It is actually in the power of the creditor to remove the item. Many times a lender will remove negative items if you’ve paid them off in order to ensure you as a repeat customer.
Dispute credit errors with credit bureaus - The Fair Credit Reporting Act (FCRA), created by the Federal Trade Commission gives every credit customer the right to contact credit agencies directly to identify negative items and dispute them. In the eyes of credit bureaus you are “not guilty" until proven so when it comes to negative information on your credit report. That’s why it’s important to keep all proof of paid accounts, just in case you encounter an error on your credit report and dispute it with the credit bureaus. By law, you have the right to dispute any inaccurate, unverifiable or misleading information on your credit report. If you prove that it is inaccurate, credit bureaus are responsible for removing it from your credit record. You are entitled to a free copy of your credit card report according to the FCRA on a 12 month basis. In order to obtain a free copy of your credit report, contact Equifax, Experian, and TransUnion directly.
Seek the advice of a financial counselor – Financial advisors, also sometimes called debt management counselors, exist in order to help consumers restore credit. Legit debt counselors will go a long way in helping you overcome bad credit behavior, and help you get on the path to rebuilding your credit. If a debt management company recommends changing your SIN in order to start with a clean bill of credit, or suggests you dispute items on your credit report that are accurate, you should report them to authorities immediately – and DON’T take their advice. If you do decide to enroll in a debt management program, be advised that many debt counselors will report you to the credit bureaus if you leave the program before its completion. In the eyes of lenders and credit bureaus this is a negative mark on your credit report. However if you participate in and complete a debt management program, credit bureaus will note it as a plus on your credit report. Any effort to learn good credit behavior on your part will reflect positively on your credit history in the eyes of lenders.
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