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Be Cautious of the Don'ts for Credit Repair
You can improve your credit history on your own for little or no charge. Unfortunately, many consumers falli for quick fix "credit repair" companies that promises seem to be too goo to be true and demand an up-front fee for the false promise that they can "repair" your existing credit record or create a new one for you.

Fraudulent credit repair companies may claim that they can remove negative information from your credit report. These same companies may encourage you to create a "new" credit report or identity by applying for an Employer Identification Number (EIN) to use instead of your social security number. An EIN is used primarily by businesses, and obtaining an EIN under false pretenses is a crime.

A credit repair company cannot remove negative, but accurate, information on your credit report. It will be removed only after the required amount of time as stated in the Fair Credit Reporting Act. For example, records of bankruptcy can remain on a your credit report for 10 years and foreclosures are reported for seven years (see "How Long Items Remain on Credit Report" for more on this). This doesn't mean that you can't try and contest a credit bureau for information that may be accurate. If you feel your creditor may have taken a wrong step or that the creditor may not respond within the Fair Credit Reporting Act's mandatory timeline (30-45 days), then it may be beneficial to still try and contest the item.

Credit Repair Fraud (Beware)
If you respond to a credit repair offer here are some signs you may want to be cautious:

• Companies that don't tell you your legal rights and what you are able to do (legally) to help repair your credit for free.
• Anyone that recommends that you not contact a credit bureau directly.
• Want you to pay for services before any services are actually provided.
• Advises you to dispute all information in your credit report or takes any action that seems illegal, such as creating a new credit identity by obtaining a federal Employer Identification Number (EIN) to use instead of a social security number. If you follow illegal advice and commit fraud, you may be subject to prosecution.
• It's a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, and to obtain an EIN (from the Internal Revenue Service) under false pretenses.
• Again, be careful of anything that seems too good to be true. As life often proves if it seems too good to be true, it usually is.