Protect Yourself From Credit Repair Scams


With an improved economy and real estate prices on the rise, your good name and reputation are more important than ever when applying for new credit cards, an automobile, rental property or home mortgage. Many creditors have tightened their lending guidelines, effectively barring millions of Americans from borrowing money.

Long gone are the days of obtaining credit, goods, benefits, services and/or employment with a 620 FICO score. In most instances, a borrower will be denied if they maintain a credit score lower than 740. Even those with high credit scores have experienced reduced credit lines or closed credit card accounts and equity lines. When an account has not been closed, credit limits have been reduced to the existing balance due.

Mortgage lenders, auto finance companies, credit card issuers, credit unions and traditional banks have all raised the bar. Borrowers with low FICO scores can expect to be denied credit or to pay significantly higher interest rates than those with excellent repayment histories.

With about 52 percent of credit profiles at the Equifax, Experian or TransUnion consumer reporting agencies containing some sort of error or omission materially impacting credit worthiness, some turn to credit repair to remedy low credit scores and issues that prevent them from borrowing money. Absent self-help and the “do-it-yourself” approach, they hire a credit service organization in the restoration of their good name and reputation.

The terms credit repair, credit restoration or credit rehabilitation are somewhat synonymous. Those with bad repayment histories cannot afford to ignore the potential benefits of credit repair. In today’s economy, a strong FICO score is more important than ever.

Beware, though, when hiring a credit repair company.

Most — but not all — credit service organizations specialize in the restoration of consumer credit worthiness as well as issues related to identity. Assuming that the credit repair company is performing within established guidelines, they utilize laws enacted by Congress to dispute negative, erroneous, obsolete and/or fraudulent information contained within your consumer credit profile.

Utilizing the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Fair Credit Billing Act and the Fair and Accurate Credit Transactions Act, a reputable credit service organization will assist in the submission of disputes electronically, verbally and in writing to the Equifax, Experian and TransUnion consumer reporting agencies. Disputes are also submitted to creditors, collection agencies, and third-party record providers, in addition to state, federal, and local regulatory authorities.

Unlike most credit repair clinics that submit the same written complaint letters monthly, a reputable credit repair company will have devised a strategy whereby disputes are submitted electronically, verbally and in writing over a long period of time to the credit reporting agencies, creditors, collection agencies and third-party record providers reporting negative, inaccurate, obsolete and erroneous information.

Keep in mind that anything a credit repair company can do, you can do yourself for little to no cost. With that said, a reputable credit service organization should have an edge over consumer driven disputes as they will possess the education, knowledge and a source proven method that is generally unknown to the average consumer.

A reputable credit service organization should have a provable track record of results in the modification or removal of erroneous and inaccurate judgments, liens, mortgage foreclosures, bankruptcies, short-sales, student loans, credit inquiries, derogatory accounts and collection agency entries, personal identifiers and other transient data from a consumer’s credit report. Although the credit restoration process can take many months, most individuals should see some results within the first 45 to 60 days.

Credit repair, credit restoration and credit rehabilitation is as legal as pleading “not guilty” in a court of law. One must understand, though, that most credit service organizations are not law firms and that their employees may not be licensed to practice law. As such, even a reputable credit repair company cannot provide legal advice, nor may they represent a consumer before any court or in any legal proceeding. In the event that legal representation is required, the credit repair company should provide an appropriate attorney referral for consultation.

When self-help or the “do-it-yourself” approach is not feasible and you decide to hire a credit repair company to restore your credit, be sure to check them out. While the majority of credit repair clinics are scams, a few good ones do exist. Consumers can check out a credit service organization through their state Attorney General, the Federal Trade Commission at or through the Better Business Bureau at

South Florida Credit Scores Drop in September

Credit rating agency Experian released Wednesday its second-annual “State of Credit” list of cities with the highest and lowest credit scores.

The study found that the cities with the worst average credit score were concentrated in the South, while those with the highest average score were centered in the upper Midwest.

According to, the credit scores of consumers in the Miami metropolitan statistical area dropped in September as they continued racking up significant personal debt.

The average credit score in the Miami area was 649 in September, down from a previous low of 652 in August. The trend was the same statewide, although other Floridians seemed to maintain better credit scores. The average Florida credit score was 654 in September, down from 657 in August.

The Sunshine State ranked 35th for credit score averages nationwide. California residents had the best average credit score, at 682, while those in Mississippi ranked at the bottom, at 626.

CreditKarma found that consumers in South Florida piled on debt in three significant categories.  In September, they had an average mortgage debt of $199,701, student loan obligations of $32,254, and credit card balances of $5,548.  This is an increase of 4 percent, 2.8 percent and 1.4 percent, respectively, from the previous month.

The study also found that consumers in the Miami area ranked higher in mortgage and student loan debt, but had less credit card debt than others across the country.

Obtaining credit reports and correcting credit reporting errors is something for every consumer to seriously consider.  This is especially so in tough economic times.

Under the Fair Credit Reporting Act, as modified by the Fair and Accurate Credit Transactions Act, consumers are entitled to a free copy of their credit report under a narrow set of circumstances. 

If you are denied credit, goods, benefits, services, insurance, and/or employment, the credit reporting agencies of Equifax, Experian and Trans Union are statutorily mandated to provide a copy free of charge.  Absent these exceptions, consumers are entitled to one free “annual credit report” per year. 

Equifax can be contacted at (800) 685-1111 or; Experian can be contacted at (888) 397-3742 or; and Trans Union can be contacted at (800) 916-8800 or

For your free annual credit report, contact the central source at 877-FACT-ACT (877-322-8228) or  Follow the voice prompts and obtain your credit report for review.

Specialty consumer reporting agencies: the ‘other’ credit bureaus

If you have ever applied for credit, you are probably familiar with the Equifax, Experian and Trans Union consumer reporting agencies. Based upon creditworthiness and the likelihood of repayment, creditors will determine whether to extend you credit.

What many consumers do not realize is that “other” consumer reports exist on them. Known as specialty consumer reports, these files contain user specific information detailed toward a particular industry.

Specialty consumer reports are designed to meet the needs of the reporting agencies’ clientele. They are used by insurance companies, landlords, banks, etc., to predict how likely you are to get into a car accident, damage your apartment, or bounce a check.

The most widely used specialty consumer reports relate to:

Check-writing history – bounced checks, fraud and accounts closed due to insufficient funds.

Tenant history – rental history, including relevant information obtained from court records and previous landlords.

Insurance claims history – history on your past claims.

Medical history – routine health information and history of medical conditions such as diabetes, asthma or depression.

Prescription history – prescription drugs used and dosages/refill history.

Employment background – screening for criminal history, marital status, prior addresses, driving record, and/or credit history.

While specialty consumer reports do not exist for every consumer at every agency, it is to your advantage to learn what has been reported and to whom. It is equally important to understand your rights under the Fair Credit Reporting Act as the information contained within a specialty consumer report may be used to deny employment, a bank account, apartment rental, health, life or auto insurance.

If you are denied based upon information contained within a specialty consumer report, be sure to obtain the required notice of adverse action. Thereafter, request a copy of the offending specialty consumer report and dispute any information deemed inaccurate, obsolete or fraudulent.

The Fair Credit Reporting Act regulates the specialty consumer reporting industry. In conjunction with other legislation, consumers have important rights:

•The right to one free report every year or upon notice of adverse action. Upon request, specialty consumer reporting agencies must provide a free copy of your report once per year or upon denial based upon information in the report.

•The right to dispute inaccurate or obsolete information. The specialty consumer reporting agency must investigate your dispute and correct or remove inaccurate or outdated records.

•The right to be advised of a background check. An employer who plans to conduct a background check must notify you and get your permission.

•In an effort to avoid unnecessary embarrassment, consumers should order a specialty consumer report prior to applying for employment, a bank account, apartment rental, health, life, or auto insurance.

The Privacy Rights Clearinghouse recommends requesting specialty consumer reports under the following circumstances:

•When shopping for homeowner’s or automobile insurance. Order a copy of your CLUE (comprehensive loss underwriting exchange) or A-Plus claims report. If you filed claims on existing policies, review the report for accuracy.

•If someone has fraudulently accessed your bank account. Order a copy of your Chexsystems report.

•When applying for employment. Find out the name of the screening company and order a copy of your report prior to authorizing release to a third-party.

•If you are an identity theft victim. Order all credit and specialty consumer reports. Place a fraud alert and dispute all information related to the identity theft.

•If you plan to rent a home. Order your tenant history report.

•When applying for private health, life, long-term care, or disability insurance. Order your MIB report from the Medical Information Bureau.

Unlike the credit reporting agencies of Equifax, Experian and Trans Union, there is no one-stop shop for obtaining your specialty consumer reports. An individual request must be submitted to each agency.

To order your check writing history report, contact Chexsystems at (800) 428-9623; Shared Check Authorization Network at (800) 262-7771; and Telecheck at (800) 366-2425.

To order your tenant history report, contact ChoicePoint at (877) 448-5732 and SafeRent at (888) 333-2413.

To order your insurance claims history report, contact ChoicePoint at (866) 312-8076 and A-Plus Reports at (800) 709-8842.

To order your medical history report, contact Medical Information Bureau at (866) 692-6901.

To order your prescription history report, contact MedPoint at (888) 206-0335 and IntelliScript at (877) 211-4816.

To order your employment background screening report, contact ChoicePoint at (866) 312-8075.

To order your ChoicePoint Full File Disclosure, visit

For more information on a wide range of consumer protection topics, including background checks, medical records and other privacy issues, please visit The Privacy Rights Clearinghouse at


William E. Lewis Jr. & Associates is a solutions based professional consulting firm specializing in the discriminating individual, business or governmental entity. To learn more, tune into “The Credit Report with Bill Lewis,” a daily forum for business and financial news, politics, economic trends, and cutting edge issues on AM 1470 WWNN.