Many people every year get taken advantage of by thousands of scam artists that prey on distressed consumers in need of credit repair. They advertise that for a fee, they can wipe your slate clean. In 1997, the Credit Repair Organizations (CRO) Act was passed to put guidelines on what these businesses can do. However, many still choose to ignore it, and can potentially get you into not only financial trouble, but also criminal trouble.

For example, a relatively new scam out there is being called file segregation. The way it works is the credit-repair agency will show you how to obtain an employee-identification number (substitutes for a Social Security Number). Once obtained, they instruct you to use this new number to apply for new credit, normally using different addresses and phone number to make it difficult for the creditor to link to your last identity. This in essence creates a false identity with a new credit history, which is a felony.

Although the majority of credit-repair agencies do conduct business within the guidelines of the CRO Act, they still charge anywhere from $100 to $1,000 to do what you are able to do with a letter, and no more than the cost of postage. The fact of the mater is the credit bureaus can list negative information for seven years and bankruptcy information for as long as 10 years. And the only way to repair your credit is with new on time payments and by paying off your old debt. You are however entitled to dispute and have any errors fixed that are reported on your credit. This is what the majority of credit-repair agencies will do for you. They generally will state that many consumers can’t even read a credit report, and that using them is just the same as using a company like H&R Block to do your taxes.

Although a credit report may seem complicated, if you have someone willing to walk you through it the first time, it will become easy to understand. This is a service which I offer at no cost to those who need it (visit www.SellingNorthernNV.com). However, I am not by any means a credit professional, and can only provide you with my general knowledge on the subject. I can however get you started in the right direction by showing you where to obtain the information you need to properly have any errors which may appear on your report corrected. You may also be interested in know that you are entitled to add a statement to your report explaining why certain accounts are being reported in a negative way. When applying for credit such as a mortgage loan, the lender will have a chance to consider your explanation when deciding whether or not to grant your loan.

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