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A significant industry has grown, offering to help "repair" people's credit
records. Some promise to "erase bad credit", or make other sensational
promises of new, clean credit histories. Such firms usually deliver few, if any,
results for the fees they charge - bad credit cannot be "erased". Yet there are
bona fide agencies which will help you get your credit and finances back on
track.
Common Credit Repair Scams:
Getting a New Social Security Number - Individuals are only permitted to
have one Social Security number. It is against the law to use a different
Social Security number to create a false identity.
Getting a Federal Employer Identification Number (abbreviated as EIN or
FEIN) - Proponents of this "file segregation" scam claim that you can obtain
a federal tax ID number, as if you are a business, then get a clean credit
record under that tax ID number. It is against the law to use an EIN to set up
a false identity. Further, a new credit report under an EIN will not show any
credit history. It is unlikely that a creditor would regard a new business with
no credit history as a good credit risk.
Challenging Every Negative Entry on a Credit History - As a general rule, it
is lawful for credit agencies to keep accurate records of negative entries on
your credit history for up to seven years, and to keep records of any
bankruptcies for up to ten years. There are certain circumstances where
truthful negative information may be reported beyond those time periods. As
much as you do not like having negative information on your credit report,
your ability to object to inaccurate information is not meant to be a license to
harass honest creditors in an effort to remove accurate negative entries.
