The one thing that everyone should know about items on his or her credit report is that nothing that anyone can do legally can remove an accurate negative event from it. For example, if you don’t pay your credit card bill for six months and get sent to collections or have your debt charged off, that item will be on your credit report until it expires seven years later. Any credit repair company that claims to be able to remove such items from your report is scamming you. Some other signs you’re being scammed include:
- Requiring an up-front fee for services, which is illegal under federal law
- Offering to create a “new you” with a new Social Security Number in an effort to dodge your “old debts,” which constitutes identity fraud
- Asking you to sign blank forms and provide personal information, which is a shameless phish
Reputable credit repair companies will do none of these things. They will, however, offer services that include:
- Repairing or removing illegitimate negative credit report items
- Providing financial counseling services
- Working with not-for-profit debt-consolidation companies to help you restructure your debt more affordably
In New York State, a credit repair company must provide you with a written contract for all services rendered. That contract must include the following:
- A list of all items on your credit report that are illegitimate that the company will help you handle
- A full and precise description of how each illegitimate negative item will be modified through the actions of the credit repair company
- An estimated date when the modifications will take effect
Additionally, the company must provide you not only with this written contract but also with a complete copy of your applicable credit report, or reports, upon which the illegitimate items are clearly marked. You are allowed, within three business days of signing such a contract, to cancel the contract and pay nothing. The contract provided to you by the credit repair company must state this cancellation policy in writing. You must submit your intent to cancel the contract in writing too; a phone call will not suffice.
In New York State, credit repair companies are held to an exacting standard and face harsh penalties should they veer from the straight and narrow. Such companies must tell the absolute and unvarnished truth regarding all aspects of their business dealings, marketing strategies, and communication with both you and any business or reporting agency. For example, if the credit repair company is not authorized to issue credit cards, it is not allowed to offer you a credit card under any circumstances. They also can’t lie to Equifax about the negative entries on your credit report in an effort to “help” you.
Lastly, New York State also provides you, as the consumer, with direct redress against any credit repair company that damages your financial history through any illegal machinations, untrue statements, purposeful or not, or any other actions that go against the laws outlined in this document and any other applicable laws enacted and on the record even if this document is not updated in a timely manner. You are limited to three times the actual monetary loss in damages and may not be paid less than the actual monetary damages you suffered. Should you prevail in seeking redress, the state may also award you reasonable attorney’s fees for anyone handling your case.