How to avoid phony credit repair companies

 A poor credit history can be a real hindrance for people trying to recover from financial setbacks and getting behind on bills. Scammers exploit that vulnerability with phony promises of a

quick credit fix. You may have seen ads on TV or online, or received a mailer or phone call, offering to fix whatever credit woes you might have. Shady companies claim they can remove

bankruptcies, liens and bad loans from your record, or even erase a bad credit history completely, helping you start over with a new credit identity that will make you look like a better

risk to lenders.  The fact is that no one can remove bad information from your credit report if it is correct and timely. If a debt, bankruptcy or other item was accurately reported, it

stays on your credit record for up to 10 years. Negative data can be deleted if it is proven to be incorrect or out of date. Legitimate credit-repair firms say they know how to navigate the

complexities of credit reporting to find and fix those errors. But they can’t legally do anything you couldn’t do yourself, for little or no cost: file disputes with the major credit bureaus

(Equifax, Experian and TransUnion) about negative items, in hopes that investigation will show them to be wrong. Bogus credit-repair companies resort to illegal tactics, or use the promise

of cleaned-up credit to lure you into committing crimes yourself. For example, they may offer to sell you a new Social Security number to use in applying for loans. The number was probably

stolen, possibly from a child, and using it could send you to prison. Crooks might also offer you an alternative nine-digit number called a CPN (credit privacy number or credit profile

number), or direct you to falsely obtain an Employer Identification Number (EIN) from the Internal Revenue Service. Using one of those can get you in legal trouble, too. One scheme centered

on a Michigan credit-repair firm called Financial Education Services allegedly reaped more than $213 million from consumers before the Federal Trade Commission (FTC) won a May 2022 court

order that temporarily shut down the sprawling operation and froze its assets. According to the FTC, the company and its affiliates preyed for years on people with low credit scores,

advertising in English and Spanish that it could cull negative items from credits reports, charging monthly “junk fees” and aggressively recruiting customers into a pyramid scheme to line up

additional clients.