If you are among the millions of Americans who are drowning in credit card debt or facing foreclosure, there is one thing you need to know…..there is light at the end of the tunnel. You can rebuild you credit and get back on your feet!

Newspapers, radio, TV and the internet are filled with ads that promise to erase all negative information in your credit report in exchange, of course, for a fee. Companies, marketers, attorney affiliated individuals, attorneys, books, etc., boast about their savvy or legal credit repair services.

However, the truth is the scam artists who run these ads not only don’t deliver, they can’t deliver. Moreover, the law prohibits credit repair companies from charging up-front fees before performing the promised services.

Credit repair companies normally advertise something like:

• “We work with specialized companies that will repair your credit”
• “We can increase your credit score in 30 days – guaranteed!”
• “Credit problems? No problem!”
• “We can erase your bad credit – 100% guaranteed”
• “Create a new credit identity – Legally”
• “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

Once you contact them, they normally:

• Want you to pay for their credit repair services before any services are rendered (under the “Credit Repair Organization Act”, a credit repair company cannot charge you until they have completed the promised services)
• Don’t tell you your legal rights and what you can do yourself – for free
• Suggest that you try to invent a “new” credit report by applying for an Employer Identification Number (EIN) instead of your Social Security Number (SSN)
• Advice you to dispute all negative information in your credit report

Regardless of what these individuals tell you, it is a federal crime to make false statements on a loan or credit application, to misrepresent your SSN, and to obtain an EIN from the IRS under false pretenses. If you follow illegal advice and commit fraud, you may be subject to prosecution. You could be charged and prosecuted for mail or wire fraud.

So, you can do either one of two things: you can throw away your money and be scammed by a credit repair company or you can learn how to repair your own credit. Understand, however, raising your credit score is a bit like losing weight. Only time, a deliberate effort, a plan to repay your bills, and the steps shown here will improve your credit. There are no quick fixes. In fact, quick-fixes offered by credit repair companies can backfire.

CREDIT REPORT vs. CREDIT SCORE:

Although many people often interchange these terms, credit reports and credit scores are not the same thing:

• Credit report: It shows a detailed description of your credit history including your identification, employment information, open and closed accounts, existing debts you need to satisfy, accounts in positive and negative standing, inquiries, public records (e.g.: bankruptcies, foreclosures, tax liens, etc) and more.
• Credit Score: It is the actual number calculated from your credit history. Your credit score is your financial GPA. The details from your credit report are used as data points in a mathematical equation; the resulting score is primarily used to help lenders determine how much interest to charge you.

USING YOUR CREDIT SCORE:

The higher your credit score is; the more financially responsible you appear to lenders; thus, making you eligible for a low interest rate.

Moreover, credit reporting companies also sell the information in your report to insurance companies, employers, and other businesses with a legitimate need for it. For example, employers can use the information to evaluate your application employment or a promotion; a landlord can use it to consider you as a tenant; and insurance companies can use it to determine on what terms they will approve your insurance policy.

As you can see, a good credit score is very important to get ahead in life but be cautious not to let the obsession of always having a high credit score ruin your life.

We care about you. To all our readers and clients who need to drive in bad weather conditions:

• Drive slowly. Everything takes longer on snow-covered roads. Accelerating, stopping, and turning – nothing happens as quickly as on dry pavement. Give yourself time to maneuver by driving slowly.
• The normal dry pavement following distance of three to four seconds should be increased to eight to ten seconds. This increased margin of safety will provide the longer distance needed if you have to stop.

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