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Fixing your credit can be a long and involved process, with many opportunities for the novice to make a mistake. Three of the biggest mistakes you should avoid are:
1. Hiring a Fly-by-Night Firm: The Federal Trade Commission is constantly trying to stamp out scam artists promising instant credit repair, but like cockroaches, they always return. You can pretty much assume a scam if the company guarantees its results in advance, wants to charge you a big, upfront fee, or suggests you create a “new” credit report by using a different Social Security or taxpayer identification number. Most people can handle their own credit repair without paying big fees or committing fraud. If you run into problems, look for a legitimate law firm through the National Association of Consumer Advocates for help.
2. Failing to Get It All in Writing: The phone is not your friend. Although you can and should take copious notes if you ever have to have a phone conversation with a creditor, collector, or credit bureau, you’re much better off conducting credit repair in writing.
3. Reviving the Statute of Limitations: States have differing rules about how long a creditor can sue you over a debt, with most limiting the period to three to six years. Making a payment on an old debt, or even acknowledging that you owe it, can revive that statute and leave you vulnerable to a lawsuit. Make sure you know the rules for your state when dealing with old debts.
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Article Submitted On: June 18, 2007
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