A great deal of spam circulates promising to erase your bad credit, 100% guaranteed, or to create a new credit identity legally. Some claim they can remove bankruptcies, judgments, liens and bad loans from your credit file forever.
There is only one way to good credit
There is one way, and only one way, to have a good credit record: make your loan payments on time. Only time, a conscious effort and a personal debt repayment plan will improve a credit report.
Around every corner, though, someone will tell you otherwise, for a price. The people they target can least afford to lose the money, and victims usually end up with a worse credit history than when they started.
You’ve seen the ads: “Bad credit erased from bureaus’ files. Guaranteed results!” They offer an easy guide and legal forms, and the offer is usually one of two schemes.
Scam one: flooding the bureaus with disputes
For anywhere from $10 to $1,000, you get instructions to write letters to the credit bureaus contesting every entry. If the original creditor doesn’t respond (which the scheme banks on), the entry must be removed until it is verified.
Once it is verified, it goes back on your history, and the clock is reset to the original entry date. That can add several more years to the claim.
There is another catch they won’t mention. Credit bureaus can easily spot someone flooding them with dispute letters, and the law allows them to flag your account for it. What potential creditor will give you credit knowing you are playing games with past creditors?
Scam two: the “new credit identity”
The other common scam tells you to create a new credit identity by applying for a federal Employer Identification Number (EIN), and promises it’s legal. Getting an EIN is perfectly legal. Telling someone it is your Social Security number is not. That is fraud, it will probably ruin your credit for good, and it could land you in jail for attempting to defraud a federally insured institution.
It’s a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security number, or to obtain an EIN from the IRS under false pretenses. EINs are in a different number range than Social Security numbers, and lenders’ computers quickly spot them. They then find your real number, tie the two files together and flag them to show you misrepresented yourself on a loan application.
What you can legally do yourself
No one can legally remove accurate and timely negative information from a credit report. The law does let you request a reinvestigation of information in your file that you dispute as inaccurate or incomplete, and there is no charge for it.
Everything a credit repair clinic can do for you legally, you can do yourself at little or no cost. There is no way to get correct information off your credit file if the creditor who placed it there wants it to stay.
