HM
10-05-2006, 09:07 AM
an old scam is making its way back. Although, I have never heard it before, so it was new to me.
I saw a sign on the side of the road that said Don't fix your credit...start a new credit file!!! then it had an toll free #. So I called to check it out.
They give a GREAT story about the Fair Credit Reporting Act and how the government gave the consumers the ability to create a new credit file via a CPIN number, that would be used for credit purposes only and protect their Social Security #. The "new" part of this is that they call the new # a CPIN - which does not exist. The old scam involved creating new EIN #'s which have the same # of digits as a SS #. Now, these guys are charging $3,000 and guaranty a 700+ FICO. Well, this scam actually can work if done properly...meaning, you can create a new number and establish credit, but it takes much longer than they tell you.
But here is the real problem....if you do this, YOU will be commiting a felony, actually felonies - plural. This is called File Segregation and is flat out illegal. Do a google search on File Segregation and you will find out how scary this is. The new version makes it a little tough to find out what they are doing if you have never heard of it before because of a slight change in terminology.
The bottom line in credit repair is that you are stuck with what you got, unless you can prove the bad stuff on your record is actually false. Even then, it is tough because so many people are trying to falsly claim their credit is dinged inaccurately, that the credit reporting agencies generally ignore most of the crap sent to them. Yah, they are supposed to reply and so on, but they just ignore it because nobody is sueing them. Kind of a hard law suit to win if you are just trying to work the system.
I am working with another company that does credit repair a little differently. They claim that there are four laws/acts that creditors must follow to legally report derogatory credit. They claim the 4 laws/acts actually contradict each other in a few areas, and it is legally impossible for creditors to follow all the laws. They go after your actual creditors, not the credit reporting agencies. So, they request all the documentation they have on how they reported your credit, and they look for where they violated of the laws/acts. They then request them to remove the derogatory credit, or face a law suit. They charge quite a bit of money, but I have convinced them to do this service for free for one of my clients as I would be willing to send more business to them. Now, you can get into a pretty good ethical debate about this method, because if people really didn't pay their bills, then they should just take responsiblity and deal with the conseqences. Great argument. But, you also have to realize that the creditors work the system beyond beleif, and I like the idea of them getting the system worked against them.
If you do decide to work with someone regarding credit repair, please be aware that it is illegal for these people to charge you anything upfront. You can find this info on the FTC web site and search under credit repair. Also, be aware that the FTC claims to have NEVER met a legitimate credit repair company.
Also, if you are working with a mortgage broker, they are probably in the best position to help you clean up inaccurate information. The companies they run your credit with not only get the attention of the credit reporting agencies (because they pay them...duh), they can expedite the corrections.
I saw a sign on the side of the road that said Don't fix your credit...start a new credit file!!! then it had an toll free #. So I called to check it out.
They give a GREAT story about the Fair Credit Reporting Act and how the government gave the consumers the ability to create a new credit file via a CPIN number, that would be used for credit purposes only and protect their Social Security #. The "new" part of this is that they call the new # a CPIN - which does not exist. The old scam involved creating new EIN #'s which have the same # of digits as a SS #. Now, these guys are charging $3,000 and guaranty a 700+ FICO. Well, this scam actually can work if done properly...meaning, you can create a new number and establish credit, but it takes much longer than they tell you.
But here is the real problem....if you do this, YOU will be commiting a felony, actually felonies - plural. This is called File Segregation and is flat out illegal. Do a google search on File Segregation and you will find out how scary this is. The new version makes it a little tough to find out what they are doing if you have never heard of it before because of a slight change in terminology.
The bottom line in credit repair is that you are stuck with what you got, unless you can prove the bad stuff on your record is actually false. Even then, it is tough because so many people are trying to falsly claim their credit is dinged inaccurately, that the credit reporting agencies generally ignore most of the crap sent to them. Yah, they are supposed to reply and so on, but they just ignore it because nobody is sueing them. Kind of a hard law suit to win if you are just trying to work the system.
I am working with another company that does credit repair a little differently. They claim that there are four laws/acts that creditors must follow to legally report derogatory credit. They claim the 4 laws/acts actually contradict each other in a few areas, and it is legally impossible for creditors to follow all the laws. They go after your actual creditors, not the credit reporting agencies. So, they request all the documentation they have on how they reported your credit, and they look for where they violated of the laws/acts. They then request them to remove the derogatory credit, or face a law suit. They charge quite a bit of money, but I have convinced them to do this service for free for one of my clients as I would be willing to send more business to them. Now, you can get into a pretty good ethical debate about this method, because if people really didn't pay their bills, then they should just take responsiblity and deal with the conseqences. Great argument. But, you also have to realize that the creditors work the system beyond beleif, and I like the idea of them getting the system worked against them.
If you do decide to work with someone regarding credit repair, please be aware that it is illegal for these people to charge you anything upfront. You can find this info on the FTC web site and search under credit repair. Also, be aware that the FTC claims to have NEVER met a legitimate credit repair company.
Also, if you are working with a mortgage broker, they are probably in the best position to help you clean up inaccurate information. The companies they run your credit with not only get the attention of the credit reporting agencies (because they pay them...duh), they can expedite the corrections.