Bad Credit? This Warning’s for You (Internal Link)

Got bad credit and want to do something about it?

AFSCME member, before you pick up the phone and call a company that promises to “clean up” your credit record, the Federal Trade Commission wants you to know that “no one can legally remove timely and accurate information from a credit report,” and “only time, a conscientious effort, and a personal debt repayment plan will improve your credit report.”

These days, there are so many con artists preying on consumers who have credit problems that in February the FTC sponsored a National Consumer Protection Week to alert the public to what’s going on.

The FTC says the biggest scam is by companies that offer to clean up a credit report — remove information on bankruptcies, judgments, liens and bad loans — for a fee. “The truth is,” says the FTC, “they can’t deliver. After you pay them hundreds of dollars in advance, these companies do nothing to improve your credit; many simply vanish with your money.”

Here’s the FTC’s advice: “Start by contacting your creditors as soon as you realize you can’t make the payments. If you need help working out a payment plan and a budget, contact your local credit counseling service. There are non-profit groups in every state that offer credit guidance to consumers. Also, check with your employer, credit union or housing authority for no- or low-cost credit counseling programs.”

The FTC has a number of publications that inform consumers on credit fraud and credit repair. To order, call the FTC’s Consumer Response Center at (202) FTC-HELP (382-4357), or write: Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, D.C. 20580. Consumers also may order online.

To get a copy of your credit report, call Equifax at (800) 685-1111; Experian (formerly TRW) at (800) 682-7654; or Trans Union at (800) 916-8800. The FTC says it won’t cost more than $8 to get a copy.

Under the Fair Credit Reporting Act, consumers are entitled to a free copy of their credit report if they’ve been denied credit, insurance or employment. You must ask for the report within 60 days of notice.

For online information, go to the FTC web site.