Only YOU can repair your credit

Ignore signs and ads for credit repair services. They can’t do what they claim.

I once saw a sign staked in the grass next to a gas station: “Credit repair: 1-800-XXX-XXX.” I did the best thing someone can do with one of those signs.

I stole it.

I stole it because it’s a scam! No one can repair your credit, period. Only you can repair your credit through discipline and through direct contact with your creditors and the three credit bureaus.

Thomas Nitzsche, public relations director and credit educator for Money Management International, always told me this is how consumers repair their credit:

* OBTAIN A CREDIT REPORT ANNUALLY FROM EACH OF THE THREE CREDIT BUREAUS (EXPERIAN, EQUIFAX, TRANSUNION). Under federal law, you are entitled to obtain a free credit report annually from each of the bureaus. Get them from this one-stop shop:  www.annualcreditreport.com. The three reports should match. Look for inaccuracies or mistaken accounts and refute them.

* PAY YOUR BILLS ON TIME.

* PAY DOWN OUTSTANDING DEBT.

* KEEP BALANCES LOW. Keep them below 30 percent of your credit limit. That will help you maintain a respectable debt-to-credit ratio.

* DON’T CLOSE ANY UNUSED CREDIT ACCOUNTS. Having a slightly larger percentage of unused credit can improve your debt-to-credit ratio and, in turn, your credit score.

* DON’T OPEN ANY NEW CREDIT ACCOUNTS. If they’re not absolutely necessary, resist the temptation to apply for more accounts. New applications add inquiries to your credit report. Too many of those can hurt your score.

Ignore TV and radio ads for credit repair rip-offs. Steal and destroy that sign you saw in the grass next to that gas station…then pay attention to these signs of a credit repair scam, according to the Federal Trade Commission (FTC):

• The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
• The company doesn’t tell you your rights and what you can do for yourself for free.
• The company recommends that you do not contact any of the three major national credit reporting companies directly.
• The company tells you they can get rid of negative credit information in your credit report, even if that information is accurate and current.
• The company suggests that you try to invent a “new” credit identity—and then, a new credit report—by applying for an Employer Identification Number to use instead of your Social Security number.
• The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.

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