Florida Bankruptcy Services Advise on Credit Repair Scams

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Bankruptcies increased 43% in 2008. While this is in part due to the financial downturn that accelerated at the end of 2008, it also represents a trend of increased bankruptcy filings even though new reforms in who can file were put into place in late 2005. As a result, a whole industry of credit repair businesses has sprung to life. And while their claims are seductive to those mired in debt and desperate for a solution, proceed carefully for this solution may not be what it seems. Florida bankruptcy services maintains a list of credible credit counseling services.

According to the Better Business Bureau, complaints against credit repair companies rose 38% in 2004 and have been on a steady increase since then. Overblown claims of producing clean credit histories from dismal credit reports are tempting to those bogged down in defaults, late payments, foreclosures and bankruptcies on their records. But, in reality, these credit repair and credit counseling agencies do nothing for the debtor except take money they cannot afford and sometimes vanish into the night leaving no trace.

A credit repair company can do nothing for you you can’t do for yourself. The only way to remove negative details from your credit report is either for the item to age out (meaning that it automatically drops off your report after about 7 years) or you dispute the item to the credit bureau with proof the item is incorrect. Period. There are no other ways to remove negative items from a credit report.

Now, what are the red flags that a company representing itself as a credit repair solution may not be on the level?

•    They want money up front. A lot of it. Never, ever pay up front.
•    New Social Security Number. Some companies promise their customers a fresh, clean Social Security Number. Don’t believe it. It is nearly impossible to get a new Social Security Number and illegal to have more than one.
•    They want you to create an Employer ID. A number of these companies encourage their customers to create an employer ID number with the IRS instead of using their Social Security number to produce a “new” credit record. Don’t do this either. Skirting the issue in this manner will only deepen your trouble.
•    Consumer rights. Any reputable company should provide you with a copy of your consumer rights and actions you can take for yourself.
•    Dispute all information. Some companies advise their clients to dispute all the information on their credit report.   This is fraud and you may be subject to persecution. Contact FL bankruptcy services for a listing of government approved credit counseling agencies.
•    The company recommends you not contact a credit bureau. This is absolutely your right and the proper way to clean up your credit.

Sources on the internet or FL bankruptcy services can answer further questions.

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