Cruz: 'Credit doctors' can be recognized
by outrageous fees
Question: I need your advice
on contracting the services of these people who claim
to know loopholes to fix your credit report. I've seen
ads on TV asking for $399 to receive their help. Just
how legitimate are they? And can they really do something
we cannot do ourselves?
Answer: Your suspicions are right. So-called
"credit doctors" and "credit repair" companies don't
do anything you could not do on your own -- except charge
outrageous fees. By the same token, nobody can "fix"
your credit report if by that you mean removing information
that is damaging but accurate, and that is required
to stay in your credit file.
Thanks to amendments to the Fair Credit Reporting
Reform Act, which became effective in October 1997,
the burden of proof in disputes has shifted from consumers
to the credit bureaus. Disputed information must be
verified within 30 days or removed, and consumers can
sue a creditor that fails to correct an obvious error.
And yet, every day "credit repair" companies promise
to "clean up" credit reports.
A much better solution is to order a copy of the guide
published by the Institute of Consumer Financial Education
in San Diego, which includes more than a dozen sample
letters to use when communicating with credit reporting
agencies about mistakes and problems. The clearly written
guide explains how to obtain credit reports, how to
read them and how to make changes and corrections. It
also includes a section on establishing or re-establishing
For a copy of the 44-page guide, now in its Twelfth Printing, send a check or money order for $10 to the
Institute of Consumer Financial Education, P.O. Box
34070, San Diego, CA. 92163-4070. You also can buy the
guide online at the Institute's Web site: www.financial-education-icfe.org.
Q: One subject you might want to discuss is
identity theft and how one should periodically contact
the various credit reporting companies to check on unusual
activity. You would do a great service by providing
the names and phone numbers.
A: The problem of identity theft -- somebody
pretending to be you and running up large bills -- has
gotten worse in the electronic age. The Internet and
other forms of electronic commerce make it easier for
sophisticated crooks to access Social Security numbers
and other personal information.
Here are some common-sense tips:
||Protect your Social
Security number, credit card numbers, account passwords
and other personal information. Never give out these
numbers unless you initiate the contact with a person
you know and trust.
||Minimize the damage
in case your wallet gets lost or stolen. Don't carry
around more checks, credit cards or other bank items
than you expect to need.
||Review your credit report
once a year. Here are the toll-free numbers for
three major reporting agencies: Equifax (800-685-1111),
Experian (888-397-3742), and Trans Union (800-888-4213).
Write to Humberto Cruz at Tribune Media Services,
435 N. Michigan Ave., Suite 1500, Chicago, IL 60611.