Expert Advises People To Beware of Scams
Foreclosures, debt, or past credit problems have tainted the records of many customers who turn into credit repair targets even though according to the Federal Trade Commission, accurate and timely negative information on a credit report cannot be legally removed.
Some experts, however, both warn customers about credit repair companies, and suggest they inquire about and take advantage of legitimate ways to improve one's credit score over time.
Brokers, lenders, servicers and others in the mortgage industry also can embrace and help educate borrowers about the latter.
According to Michael Mack, author of the book "How to Instantly Eliminate Credit Card Debt (Without Bankruptcy or Credit Counseling)," customers need to be "especially careful of faceless Internet companies making big promises.
"People with poor credit are desperately seeking help and guidance to repair their record," said Mr. Mack, whom friends and colleagues call "The Credit Man."
"The ads people see appear legitimate to them, and they get hooked on the hope that it will work and that they will have better credit."
As a rule, due to poor credit, or low FICO scores, potential borrowers are turned down for loans or pay higher interest rates, and even prevent people from getting jobs.
Mr. Mack warns "there are many companies out there looking to take advantage of the situation" by charging a fee to "clean up" the person's record, while in reality they cannot.
The best strategy lenders, brokers and others in the industry should apply to help, he said, is by telling consumers to be pro-active about protecting themselves.
Mr. Mack considers a first step that of "being especially suspicious" of companies that seek a payment before services are rendered and do not disclose what customers can do on their own.
"There are steps that people can take to improve their credit," he said. "But consumers need to watch where they get their information concerning what is involved in doing so."
Customers should watch out if someone advises them to always use a third party when in need to contact the credit agencies. He notes that customers can dispute incorrect information for free, and they are entitled to a free credit report if denied credit. "They have to work with someone they can trust, someone that will give them accurate information."
The worst case is if the credit repair agency suggests customers create a new credit identity for themselves.
Mr. Mack said customers often are not aware of the fact that credit card companies will "wheel and deal" and lower interest and even wipe out the principal.
He shares with his clients "the few simple rules regarding credit that can take someone with D credit to A credit in a very short time."
Mr. Mack's advice is available at the-creditman.com.
Many credit repair companies have come under fire for helping consumers conceal their real credit histories. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/