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Don't and Do's


  1. New number trick: Some credit repair agencies advise you to start a new credit file by getting a new tax ID number — CPN, credit profile number, or EIN, an IRS-issued Employer Identification Number — to use in lieu of your Social Security number. The new number may resemble a Social Security number. This trick is illegal. The FTC warns that scammers may be selling stolen Social Security numbers, often taken from children. By using a stolen number as your own, the con artists involve you in identity theft.

  2. Lying trick: Scammers may tell you to give false information on your applications. The FTC reminds consumers it’s a federal crime to lie on a credit or loan application, misrepresent your Social Security number, or obtain an EIN from the IRS under false pretenses. You could go to prison instead of to the head of the credit repair class.

  3. Protest trick: Credit bureaus remove from your credit history the items that you protest — at least while they investigate. While those things are off your credit report, some people will apply for new credit. That’s fraud.

  4. Upfront charges trick: The law requires credit repairs companies not to collect a dime from you before they perform any services.


  1. Get free copies of your credit reports: Visit to get a free copy of your credit report from each of the three credit reporting agencies, then thoroughly scrutinize the information in the reports for errors, omissions and fraudulent accounts. Be on the lookout for negative marks that should have dropped off your report because they’re more than seven to 10 years old. Most bad items drop off in seven years.

  2. Fix errors: Notify the credit reporting agency online or by letter. It will contact the other credit reporting agencies. A letter should include your name and address, the items in dispute, your argument and any supporting facts to support your claim, a formal request to resolve the issue. Send copies (not originals) of documentation that supports your claim the information is wrong. The credit reporting agency will have 30 days to investigate and communicate its decision.

  3. Request a goodwill adjustment: If your credit reports contain contents that are accurate but negative, write to your creditors and ask they remove the bad information right away. Be polite; they aren’t required to comply with your request. However, Johnson notes, they may be more willing if you still have a business relationship with them.

  4. Know your rights: The Credit Repair Organizations Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you or to charge you before they’ve performed their services. This law, enforced by the FTC, requires credit repair companies to explain: • Your legal rights in a written contract that also details the services they’ll perform. • Your three-day right to cancel without any charge. • How long it will take to get results. • The total cost you will pay.

  5. • Any guarantees.

  6. Exercise your recourse: If a credit repair company you hired doesn’t live up to its promises, the FTC says you have these options: • Sue them in federal court for your actual losses or for what you paid them, whichever is more. • Seek punitive damages — money to punish the company for violating the law.

  7. • Join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorney’s fees.

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