ID Theft Victims... Fix Your Credit Today Starting From Scratch
!
If you are the victim of identity theft, you need to get your
life back on track. Probably this is the first time this has
ever happened to you and you're walking in a combination of fear
anxiety and depression. You wonder why did this happen to me!.
Don't worry you're not alone. Hundreds of thousands of people
are in the same position you're in right now and I want to
encourage you. This to shall pass.
I'm not negating the seriousness of your dilemma, but I want you
to know that there is light at the end of the tunnel, so lets
get started.
Most of the information in this report was gathered from the FTC
website. http://www.ftc.gov
The first thing you need to be very wary of is...
The Scam
Everyday, companies nationwide appeal to consumers with poor
credit histories. They promise, for a fee, to clean up your
credit report so you can get a car loan, a home mortgage,
insurance, or even a job. The truth is, they can't deliver.
After you pay them hundreds or thousands of dollars in fees,
these companies do nothing to improve your credit report; most
simply vanish with your money.
The Warning Signs
If you decide to respond to a credit repair offer, look for
these tell-tale signs of a scam:
* companies that want you to pay for credit repair services
before they provide any services. * companies that do not tell
you your legal rights and what you can do for yourself for free.
* companies that recommend that you not contact a credit
reporting company directly. * companies that suggest 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. * companies that advise
you to dispute all information in your credit report or take any
action that seems illegal, like creating a new credit identity.
If you follow illegal advice and commit fraud, you may be
subject to prosecution.
You could be charged and prosecuted for mail or wire fraud if
you use the mail or telephone to apply for credit and provide
false information. It's a federal crime to lie on a loan or
credit application, to misrepresent your Social Security number,
and to obtain an Employer Identification Number from the
Internal Revenue Service under false pretenses.
Under the Credit Repair Organizations Act, credit repair
companies cannot require you to pay until they have completed
the services they have promised.
The Truth
No one can legally remove accurate and timely negative
information from a credit report. The law allows you to ask for
an investigation 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. According to the Fair
Credit Reporting Act (FCRA):
* You're entitled to a free report if a company takes adverse
action against you, like denying your application for credit,
insurance, or employment, and you ask for your report within 60
days of receiving notice of the action. The notice will give you
the name, address, and phone number of the consumer reporting
company. You're also entitled to one free report a year if
you're unemployed and plan to look for a job within 60 days; if
you're on welfare; or if your report is inaccurate because of
fraud, including identity theft.
* Each of the nationwide consumer reporting companies Equifax,
Experian, and TransUnion is required to provide you with a free
copy of your credit report, at your request, once every 12
months. The companies are rolling this out across the country
during a nine-month period. By September 2005, consumers from
coast to coast will have access to a free annual credit report
if they ask for it. For details, see Your Access to Free Credit
Reports at ftc.gov/credit. Otherwise, a consumer reporting
company may charge you up to $9.50 for another copy of your
report within a 12-month period. * You can dispute mistakes or
outdated items for free. Under the FCRA, both the consumer
reporting company and the information provider (that is, the
person, company, or organization that provides information about
you to a consumer reporting company) are responsible for
correcting inaccurate or incomplete information in your report.
To take advantage of all your rights under this law, contact the
consumer reporting company and the information provider.
STEP ONE
Tell the consumer reporting company, in writing, what
information you think is inaccurate. Include copies (NOT
originals) of documents that support your position. In addition
to providing your complete name and address, your letter should
clearly identify each item in your report you dispute, state the
facts and explain why you dispute the information, and request
that it be removed or corrected.
You may want to enclose a copy of your report with the items in
question circled. Your letter may look something like the one on
page 6. Send your letter by certified mail, "return receipt
requested," so you can document what the consumer reporting
company received. Keep copies of your dispute letter and
enclosures.
Consumer reporting companies must investigate the items in
question usually within 30 days - unless they consider your
dispute frivolous.
They also must forward all the relevant data you provide about
the inaccuracy to the organization that provided the
information.
After the information provider receives notice of a dispute from
the consumer reporting company, it must investigate, review the
relevant information, and report the results back to the
consumer reporting company.
If the information provider finds the disputed information is
inaccurate, it must notify all three nationwide consumer
reporting companies so they can correct the information in your
file.
When the investigation is complete, the consumer reporting
company must give you the results in writing and a free copy of
your report if the dispute results in a change. If an item is
changed or deleted, the consumer reporting company cannot put
the disputed information back in your file unless the
information provider verifies that it is accurate and complete.
The consumer reporting company also must send you written notice
that includes the name, address, and phone number of the
information provider.
If you request, the consumer reporting company must send notices
of any correction to anyone who received your report in the past
six months. You can have a corrected copy of your report sent to
anyone who received a copy during the past two years for
employment purposes.
If an investigation doesn't resolve your dispute with the
consumer reporting company, you can ask that a statement of the
dispute be included in your file and in future reports. You also
can ask the consumer reporting company to provide your statement
to anyone who received a copy of your report in the recent past.
You can expect to pay a fee for this service.
STEP TWO
Tell the creditor or other information provider, in writing,
that you dispute an item. Be sure to include copies (NOT
originals) of documents that support your position. Many
providers specify an address for disputes.
If the provider reports the item to a consumer reporting
company, it must include a notice of your dispute. And if you
are correct - that is, if the information is found to be
inaccurate - the information provider may not report it again.
For more information, see How to Dispute Credit Report Errors at
ftc.gov/credit.
Reporting Accurate Negative Information
When negative information in your report is accurate, only the
passage of time can assure its removal. A consumer reporting
company can report most accurate negative information for seven
years and bankruptcy information for 10 years.
Information about an unpaid judgment against you can be reported
for seven years or until the statute of limitations runs out,
whichever is longer. There is no time limit on reporting:
information about criminal convictions; information reported in
response to your application for a job that pays more than
$75,000 a year; and information reported because you've applied
for more than $150,000 worth of credit or life insurance.
There is a standard method for calculating the seven-year
reporting period. Generally, the period runs from the date that
the event took place.
For more information, see Building a Better Credit Report at
ftc.gov/credit.
The Credit Repair Organizations Act
By law, credit repair organizations must give you a copy of the
Consumer Credit File Rights Under State and Federal Law" before
you sign a contract.
They also must give you a written contract that spells out your
rights and obligations. Read these documents before you sign
anything. The law contains specific protections for you. For
example, a credit repair company cannot:
* make false claims about their services * charge you until
they have completed the promised services * perform any services
until they have your signature on a written contract and have
completed a three-day waiting period. During this time, you can
cancel the contract without paying any fees
Your contract must specify:
* the payment terms for services, including their total cost *
a detailed description of the services to be performed * how
long it will take to achieve the results * any guarantees they
offer * the company's name and business address
Have You Been Victimized?
Many states have laws regulating credit repair companies. State
law enforcement officials may be helpful if you've lost money to
credit repair scams.
If you've had a problem with a credit repair company, don't be
embarrassed to report it.
While you may fear that contacting the government will only make
your problems worse, remember that laws are in place to protect
you. Contact your local consumer affairs office or your state
Attorney General (AGs).
Many AGs have toll-free consumer hotlines. Check the Blue Pages
of your telephone directory for the phone number or check
www.naag.org for a list of state Attorneys General.
Need Help? Don't Despair
Just because you have a poor credit report doesn't mean you
won't be able to get credit. Creditors set their own
credit-granting standards and not all of them look at your
credit history the same way.
Some may look only at more recent years to evaluate you for
credit, and they may grant credit if your bill-paying history
has improved. It may be worthwhile to contact creditors
informally to discuss their credit standards.
If you're not disciplined enough to create a workable budget and
stick to it, work out a repayment plan with your creditors, or
keep track of mounting bills, consider contacting a credit
counseling organization.
Many credit counseling organizations are nonprofit and work with
you to solve your financial problems. But not all are reputable.
For example, just because an organization says it's nonprofit,
there's no guarantee that its services are free, affordable, or
even legitimate. In fact, some credit counseling organizations
charge high fees, or hide their fees by pressuring consumers to
make "voluntary" contributions that only cause more debt.
Most credit counselors offer services through local offices, the
Internet, or on the telephone. If possible, find an organization
that offers in-person counseling.
Many universities, military bases, credit unions, housing
authorities, and branches of the U.S. Cooperative Extension
Service operate nonprofit credit counseling programs. Your
financial institution, local consumer protection agency, and
friends and family also may be good sources of information and
referrals.
Reputable credit counseling organizations can advise you on
managing your money and debts, help you develop a budget, and
offer free educational materials and workshops.
Their counselors are certified and trained in the areas of
consumer credit, money and debt management, and budgeting.
Counselors discuss your entire financial situation with you, and
help you develop a personalized plan to solve your money
problems. An initial counseling session typically lasts an hour,
with an offer of follow-up sessions.
For more information, see Knee Deep in Debt and Fiscal Fitness:
Choosing a Credit Counselor at ftc.gov/credit.