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Resolution for 2009: Shape up Your Credit Report
NEW YORK December 24, 2008
Getting your credit report in shape in 2009 is a sound New Year's resolution. Just make sure you're not reeled into any scams.
With a deepening recession leaving more people in financial distress, fraudulent services promising to scrub credit reports of negative information are rampant. Just this year, the Federal Trade Commission saw a 50 percent spike in complaints about such businesses.
"There are bad actors everywhere. And they're crawling out from under their rocks for the holidays," said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, an association of nonprofit counselors.
Services billing themselves as credit doctors and credit clinics, for instance, can't really improve your report, she said. The truth is, if the negative information is accurate, nobody can get it removed — not even you.
That doesn't mean you shouldn't resolve to spit-shine your credit report in 2009. Credit reports are regularly pulled by potential employers, landlords and lenders. Staying on top of what's in your report will also ensure you get better rates on loans.
So before you get started, a few points to keep in mind.
WATCH FOR SCAMS
If you encounter a service promising to remove negative data from your report, it's probably safe to assume it's a scam. That's because a debt collection can stay on your credit report for up to seven years. A chapter 7 bankruptcy, the most common type which wipes clean unsecured debt such as credit card bills, can be reported for up to 10 years.
In fact, FTC spokesman Steve Baker said he's never seen a legitimate credit repair operation.
"I won't say it can't exist. But I've never seen one," he said.
The details may differ, but Baker said "the basic essence of the scam is the same." It goes something like this:
Sourece:http://abcnews.go.com/Business/wireStory?id=6524723
