Chubb and Consumer Protection

How to Clean Up Your Credit Report Safely

The Federal Trade Commission (FTC) has charged seven related companies with violating federal law by falsely promising to remove negative information from consumers’ credit reports.

According to the FTC, the defendants charge consumers up to $2,000, including $300 in advance, promising to improve credit scores by removing negative information such as late payments, charge-offs, collections, inquiries, delinquencies, judgments, and accounts discharged in bankruptcy. “FTC Charges Seven Credit Repair Companies with Deceiving Consumers Throughout the U.S.” Federal Trade Commission (March 16, 2009).

Commentary

In addition to facing deceptive marketing charges under the FTC Act, the defendants are charged with violating the Credit Repair Organizations Act by misrepresenting their services; charging in advance for credit repair services; and failing to provide consumers with written contracts and other materials that contain written disclosures required by law or deviating from the required wording for the disclosures.

The agency seeks to make them stop the violations and pay restitution to the consumers.

Because a few points added to a credit score can mean a lower interest rate, it is tempting to employ a credit repair service. However, the FTC advises that only time, a conscious effort, and a personal debt repayment plan can improve your credit report.

It is important to learn what information is contained in your credit report. If you find errors or mistakes, federal law gives you the right to have them corrected – free of charge.

Federal law requires that the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – provide you with a free copy of your credit report once every 12 months, if you ask for it. To order your free report, visit annualcreditreport.com or call 1-877-322-8228.

For additional information, visit the FTC page Credit Repair: How to Help Yourself.