There may be a “Get Out of Jail Free” card in the game of Monopoly, but there is no get out of debt free card in the game of real life. Despite the glut of companies that promise to repair your credit report and expunge your financial record, only time and strict budgeting will heal that wound.
The Federal Trade Commission warns consumers that it is illegal to have negative history wiped from your credit report as long as the information is accurate. If you think the information on your credit history is in error, you can contest it, but if you did the crime (establish a poor credit history), you have to do the time (wait for that information to expire from your credit report).
Consumer reporting companies like Equifax, Experian and TransUnion can report all accurate credit history for seven years and can report bankruptcy for ten years. Long story short, consumers should be wary of companies that offer to clean up your credit.
The FTC offers the following tips to identify a fraudulent credit repair offer:
- The company wants you to pay for credit repair services before they provide any services. Credit repair companies cannot require you to pay until they have completed the credit repair services they promised.
- The company doesn’t tell you your rights and what you can do for yourself for free. By law, you are allowed to request a free investigation of information in your file that you dispute as inaccurate or incomplete.
- The company recommends that you don’t contact any of the three major national consumer reporting companies directly.
- The company promises to remove negative credit information in your credit report, even if the information is accurate and current. There’s no easy fix for bad credit. Improving your credit takes time and a conscious effort to pay your debts.
- The company suggests that you apply for an Employer Identification Number to use instead of your Social Security number so you can invent a “new” credit identity – and then, a new credit report. Lying on a loan or credit application, misrepresenting your Social Security number, or to get an Employer Identification Number from the Internal Revenue Service under false pretenses is illegal.