January 12, 2015 | dan Better Business Bureau of Acadiana is warning consumers to beware of companies that falsely promise quick credit repair, often for high fees. “Local and national companies are claiming to be able to erase bad credit for upfront fees of $250 or more. Some even charge monthly fees after the first fee. The BBB has great concerns about companies in the credit repair industry that make promises they can’t keep,” said Sharane Gott with the agency. She said nobody can erase bad credit. “Consumers can have credit reporting errors corrected, but if it is a valid debt, it is reportable. No one can make bad credit scores simply disappear,” Gott said. She said numerous companies claim they can clean up your credit report so you can obtain a car loan, a home mortgage or even get a job. “Based on BBB experiences, these companies can’t deliver,” Gott said. “The truth is, no one can legally remove accurate and timely negative information from a credit report.” Not only are these companies making promises they can’t deliver, she said they are charging a great deal of money for a free service you can do yourself. “The law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost,” Gott said. “According to the Fair Credit Reporting Act, you are entitled to a free copy of your credit report if you’ve been denied credit within the last 30 days. You can also dispute mistakes or outdated items for free,” Gott said. She advised people to: •Avoid any company that wants you to pay for credit repair services before they provide any services. It is against the law. •Avoid any credit repair company that will not tell you your legal rights and what you can do yourself for free. •Avoid any credit repair company that tells you not to directly contact a credit reporting company. •Avoid any credit repair company that advises you to dispute all of the information in your credit report. •Avoid any company that tells you it can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current. •Avoid any company that suggests creating a new credit identity or applying for an Employer Identification Number to use instead of your Social Security number. This is illegal, and it leaves consumers open to prosecution for fraud. “You can improve your credit report, but it takes time, a conscious effort and sticking to a personal debt repayment plan,” Gott said. To rebuild your credit, she advises starting by establishing credit. “A good credit history is essential. If you don’t have any credit cards, you might consider opening an account, using it sparingly and paying it off at the end of the month. Someone with no credit cards tends to be regarded as higher risk than someone who has managed credit cards responsibly,” Gott said. “Consumers are entitled to one free report from each of the three companies, from annualcreditreport.com. It is vital to check these reports for inaccuracies and dispute any errors,” Gott said. “Checking your credit reports does not affect your score.” People should also pay off their debt rather than move it around, she said. “Shuffling debt around from one line of credit to a new one can be a problem.” To pay off your debt, she advises paying off the highest balances first. “Though you may be tempted to pay off smaller balances first, paying down a large balance on a particular line of credit may raise your score, because it represents the freeing-up of a larger portion of your available credit,” Gott said. And finally, don’t hide. “If you are over your head in debt, contact your creditors. If you can start managing your credit and paying on time, your score should increase over time. Seeking assistance from a credit counseling service will not hurt your credit score,” Gott said.