Credit Repair 101

By Lisa Cunningham, Director of Communications

Happy New Year from Pop-A-Lock Locksmiths!!

It’s a new year, and you know what that means: New Year’s resolutions. For many Americans, those resolutions typically include things like getting in shape, dieting, and getting their finances in order. In fact, with the holidays just behind us and tax time right around the corner, you’ll likely soon be bombarded with TV commercials and internet promotions from companies promising everything from rapid tax refunds to credit repair.

While rapid refunds may be attractive to those needing a quick cash fix to pay off holiday bills, credit repair is the more ominous threat. Firms offering that service specifically target individuals who may have a hard time financing a large purchase, such as a new car, because of previous — and in many cases — on-going, poor money management habits.

But if you are one of millions of Americans who are seeking to repair your credit, don’t be fooled. There is no quick fix to better credit. In fact, according to the Federal Trade Commission, no one can remove accurate, negative information from your credit report. The only solution to a less-than-stellar report is work, time, and exemplary financial management.

According to the FTC, you should beware any credit repair company which does the following:

• Guarantees that it can erase all negative information from your credit report, even if the information being reported is factual. All negative credit information which is accurate, such as collections and charge-offs, will remain on your report for 7 to 10 years, no exceptions.
• Requires you to pay for credit repair services before any services have been rendered
• Recommends against contacting any of the three major credit bureaus–Equifax, Experian, or TransUnion–directly.
• Suggests that you create a new credit identity, and hence, a new credit report–by applying for an Employer Identification Number (EIN) to use in lieu of your social security number
• Advises you to dispute all the information in your credit, regardless of whether it is timely or accurate

All these things are sure signs of a credit repair scam. According to the FTC, it’s better to save your money and repair your credit legally–yourself. If your finances are on your list of things to improve in 2011, follow these simple tips to get started:

• Order your free credit report from each of the three major credit bureaus. Consumers are allowed one free report from each bureau each year. Check yours for suspicious items and errors, such as negative accounts which you have paid off.
• Dispute any erroneous information by contacting each of the three credit bureaus in writing. You can find their addresses here. The bureaus will investigate the error with your creditors and notify you of their findings in writing.
• Set a budget to track spending. That’s the only way you can find any cash leaks and find out how to fix them.
• If you need help setting a budget or want more information about financial freedom, contact the National Foundation for Credit Counseling or 360 Degrees of Financial Literacy.

Remember, anything a credit repair firm can do to clean up your credit, you can do for yourself. All it takes is a little time, patience, and resolve to manage your finances differently — better — in 2011.

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Have You Had Your Annual Credit Checkup?

By Lisa Cunningham, Director of Communications

Just as you should do with your physical health, you need to give your financial health a checkup at least once a year. Good financial health starts with a solid credit report.

Under the Fair Credit Reporting Act (FCRA), you are entitled to one free credit report per year from each of the national consumer reporting agencies–Equifax, Experian, and TransUnion.

Your credit report contains vital information about your financial habits and health. It includes data about where you live, how and when you pay your bills, and whether you’ve ever been sued, arrested, or filed for bankruptcy. This information is used to determine your eligibility to rent an apartment, buy a car, and increasingly, to get a job.

Why should you check your report at least once every 12 months?

For two main reasons. First, because the information on your credit report is used to determine your eligibility for credit or employment, you want to make sure all of the data concerning your financial history is correct, complete, and up-to-date. Unfortunately, mistakes in reporting do occur, and you want to catch and correct them as soon as possible.

Second, you want to protect yourself from identity theft. Identity thieves could apply for a loan or credit in your name and wreak havoc on your financial life for years to come. Keeping abreast of the information on your report will stop thieves dead in their tracks.

What should I do if I find errors in my report?

You and you alone are responsible for reporting and having errors on your report corrected. Contact the consumer reporting agency which documented the error in writing, and explain the error. The agency must investigate the discrepancy within 30 days, and if they find that the claim is legitimate, forward the claim to the organization which reported the erroneous information.

Once the investigation is complete, the consumer reporting company must give you the written results and a free copy of your report if the dispute results in a change.

How can I get a free copy of my report?

The three consumer reporting agencies have established a central website, toll-free phone number, and mailing address through which you can order your free report.

Although several websites boast that they provide free credit reports, annualcreditreport.com is the only website which is authorized to fill orders for free credit reports. You can also order your report by calling 1-877-322-8228. And to request your report via mail, visit ftc.gov/credit, access and fill out the form, and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

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Timeshare Resales a Hot Scam in 2010

Looking to unload a timeshare? In this tough economy, so are thousands of other people. Because the economy has made it difficult for most timeshare owners to resell, many turn to outside agencies to act as a broker on their behalf.  That provides the perfect opportunity for scam artists looking to cash in.

The scam works like this: sellers pay supposed agents $1,000 or more to find a buyer for the timeshare. The agents pocket the cash and promise to find a buyer, but instead take off, leaving the owner high and dry.

This scam has become so prevalent that attorneys general in several states have warned timeshare owners to be on the lookout.

The Federal Trade Commission warns timeshare sellers to investigate any reseller through the state attorney general’s office or Better Business Bureau. They also advise timeshare owners to get all information about a resale in writing and confirm the reseller’s license is valid in the state where your timeshare is located.

Finally, the FTC advises sellers to get details about how the reseller plans to promote and advertise your timeshare.  And, experts say, you should have a system in place to monitor the reseller’s progress.

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