Tag Archives: Credit Repair

Child Identity Theft: How shady credit repair companies are stealing kids’ Social Security Numbers

Shady, fly-by-night credit repair companies that promise fast credit score improvements (700-800 in just a couple months!) may be sinking to a new low here. It seems they’re harvesting valid but inactive Social Security numbers, many from children too young to have opened financial accounts.

They sell the numbers as “CPNs,” or “Credit Profile Numbers” (sometimes the “P” is “privacy” or “protection”). They tell their customers how to piggyback their credit on the clean CPN, which has the effect of making them appear more creditworthy. Once they burn through the credit for that number, they just purchase another one (I wonder if they use a credit card).

There are several articles on the topic all over the Internet. The Sun News out of South Carolina has a good one that explains it very well. However, there are still a few questions I have about this crime:

  1. Am I to understand that simply calling it a “CPN” instead of a Social Security Number somehow makes this practice legal?
  2. How are they obtaining the SSNs of all these children? Are they using a logarithim to generate the numbers, or is your Social publicly available until you turn 18?
  3. If it is, do I have to personally go to Washington D.C. and rap my knuckles on every single noggin in Congress (and yell “Helloooo, McFly, anybody home?!” in every single ear) until this is remedied with Federal intervention?

In any case, it’s time to check your kids’ credit reports. Yes, today. You don’t want to wait until they get turned down for an auto loan fifteen years later for allegedly defaulting on $45,000 worth of credit card debt.

This has been a pretty big story in the fraud prevention world. Look for more information to surface over the next few weeks.

Do credit repair companies work?

You see the advertisements on the Internet, in your inbox and even on television; “We can fix your bad credit!” All that negative stuff on your credit report—gone in a flash. These companies know how to take your hot mess of a credit report and turn it into a bright, shiny, new credit report with no negative information.

Fine. Dandy. Except that no, they can’t.

First, let’s get our definitions straight: there is credit counseling and credit repair. The first can be a legitimate way to fix the situation you’re in. The fact that you’re in credit counseling shows up as a negative hit on your credit report and will lower your score for a while, but when you’re in over your head, it’s probably worth it.

The second one is basically a sham.

You see, while the Fair Credit Reporting Act gives consumers the right to challenge (and ultimately have removed) inaccurate or outdated items on their credit reports, information that is timely and accurate stays. There is no “secret” method to getting it removed; if you defaulted on a credit card two years ago, that’s going to haunt you for a while. If you’re staying afloat but have a massive amount of debt racked up, that’s going to show up on your report. There’s no way around it.

In other words, any company that’s promising to erase your bad credit history is scamming you.

However, that doesn’t mean your credit can’t be repaired. The thing is, you have to take the initiative to do it yourself, and it takes time—several years, in some cases.

This may not be the answer you wanted, but it’s the only true answer.

So how do you repair your bad credit on your own? First, pay off everything you owe. Don’t take on new debt if you can avoid it. If you have to take on some debt, pay it on time, every time. Visit a credit union, too—many offer small “payday alternative” loans that make those Payday Loans look like the rip-off they are. These loans are for small amounts, with very low interest rates and easy repayment terms. You’ll probably have to verify employment to show you can and will repay the loan—this is why credit unions weren’t a part or cause of Economic Crash-N-Burn ’08—they generally only gave loans to people who could handle them. REGIONAL calls its version of this loan the Step Up Loan, by the way.

At any rate, showing that you can repay a small payday alternative loan will help you re-establish your credit history and start to swing the pendulum back towards “good credit.”

Okay, I know…Dave Ramsey says that all debt is bad debt, so he’d probably bristle at my mentioning this route towards rebuilding your credit. Obviously, the ultimate goal is to not owe anyone and be able to buy most things with cash. However, you’re probably not going to hit that “able to buy a house with a briefcase full of C-notes” point for several years. In the meantime, you’re going to need to rebuild your credit so you can borrow a little here and there. And heck, if you can operate without credit once you’ve got your old debts paid off, more power to you. But let’s stay grounded in the here-and-now reality of most people for the moment.

If you’re at the point where your debts and bad credit are overwhelming, it may be time to call in a good credit counseling agency. Just be sure to remember these points:

  1. Only use credit counseling services that are not-for-profit
  2. Never pay a credit counseling service up front
  3. Make sure the agency is Better Business Bureau accredited
  4. Make sure they have an A or A+ rating from the BBB
  5. Remember that it takes time and effort on your part to fix your credit; there are no free rides.

Suspicious Email: credit reporting agencies are NOT going to remove accurate negative information

I recieved the following suspicious email message this morning. I have removed all the links; other than that, this is the full text:

Credit News: “All Three Credit Bureaus Forced to Remove All Negative Credit” 

Hi, it’s Glenn Garvin with updated news about your credit…

*** Find Out How Your Negative Credit Can Be Removed By The Bureaus***

All negative credit can now be removed from any credit report……and not just by Experian…TransUnion and Equifax will also remove all negative credit because…

….of a simple and proven legal strategy that forces them to comply with the “Law” based on Section 609 of the Fair Credit Reporting Act.

The Section 609 Credit System is patented and copyrighted and has been used on behalf of 125,000+ clients since 1999 to remove or turn to positive over 5 million negative items….

But the amazing thing is that…

It has never lost a single case. – Not one case…Ever!

The Section 609 Credit System is used for the clients of over 3,500 Law Firms and Attorneys and well over 22,000 Lenders and Loan Officers…because it works!

To Be Clear: The Section 609 Credit System can remove ALL negative credit from ANY credit report from all three Bureaus…

Think of what this can mean for you or someone you know who is currently living with damaged credit…..A huge boost in scores and no more negative credit showing up on credit reports….within a few short weeks!

There’s a lot more to know about the Section 609 Credit System….

So a Free Section 609 Guide has been prepared to explain everything.

Don’t hesitate… ***** Get Your FREE REPORT Right Here ******

I’ll check back again with more information,

Glenn

PS. This is NOT credit “repair”. You’ll learn why in the free report.

If you already have great credit, please pass this information on to some who is not as fortunate. The fastest growing segment of the entire country are people with lower credit scores.

The Section 609 System is the only successful method that legally forces the credit agencies to remove all negative credit.

CreditRestore
(mailing address removed)

Really?

A while back, I did a “play along at home” post with a suspicious email. I posted the full text, with very little comment, and then posted my list of things that should tip you off that it was a scam the next day.

This time, I’m just going to pass judgment: this email is extremely suspicious. I would not click on a single link, trust a single word, or give it a second thought. There was a mailing address at the bottom, and I can say this much about it: Glenn Garvin doesn’t live there.

What I think they’re doing is selling you some “secret” method of clearing your credit report of any negative information.

It won’t work, by the way; the three major credit reporting agencies (Experian, TransUnion and Equifax) will not remove accurate records from your credit report. The law, believe it or not, is on their side. Imagine—the financial industry having been set up over many decades by lawyers, bankers and legislators who knew exactly what they were doing and covered every base.

It reminds me of those Mortage Elimination scams you see sometimes—the ones where you pay for some “secret” information. When (and if) you get the information, it’s some crackpot theory about how your mortgage wasn’t actually money, and therefore you don’t have to pay it back, and your case will win every time in court. What actually happens is that you end up losing your house (at best) and serving time in prison for fraud (at worst).

That’s probably exactly what this “Section 609 System” is: a way for you to make your credit problems seem trivial, once you’ve been convicted on federal charges.

By the way, here is the full text of the Fair Credit Reporting Act. Section 609 says you have the right to dispute information on your credit report. It does not say the agencies have to remove it just because you said so. It’s in Section 609 (c), which is actually readable; the heavy legal-ese starts later in the Section.

Also: Glenn Garvin is apparently a journalist (Miami Herald) and libertarian activist. I’m pretty sure he isn’t selling credit repair secrets. Plus, no veteran journalist would ever use that many ellipses. It’s very poor writing.

Credit Repair Scams

They’re out there.

They’re waiting for you.

They say they want to help you. They say they can fix your less-than-perfect credit history.

What they really want is to rip you off.

Big time.

First off, it is important to know that there are legitimate agencies that can help you get your financial situation back on track. I’ll talk about some of those later.

However, there are also a lot of agencies looking to help themselves to your cash. Here are a few things to remember:

  1. You should never pay an upfront fee for any type of credit counseling service. This is a major warning sign that they are up to no good.
  2. They must (by law) provide you with a copy of your rights as a consumer. This tells you what you may and may not do in regards to your credit history. If they do not provide this information, it is another warning sign.
  3. If your credit history has accurate negative information, it’s there to stay for seven years (ten for bankruptcy). There is no legal way to have it removed. Are they offering to delete records of a credit card you actually defaulted on? Warning sign.
  4. If there are mistakes on your report, know that you can correct them yourself for free. If an agency is trying to keep you from contacting a credit bureau yourself, that’s…you guessed it: a warning sign.
  5. It is illegal to try to create a new Social Security number or Employer Identification number for the purpose of creating a clean credit file. It doesn’t work, and it can get you into far worse trouble (we’re talking about the kind of trouble that could involve handcuffs and mugshots).
  6. Check out any credit reporting agency with the Better Business Bureau before you even consider using their services.
  7. The minute they use the term “piggybacking,” walk away. It doesn’t work. Warning sign.
  8. There are advertisements everywhere for credit repair services—email messages, on the radio, even on television. I’m just going to throw this out there: ignore them all. Maybe some of them are legit, but many are not. Do your own research and make your own decision. A flashy commercial that makes big promises is a definite (say it with me) warning sign.
  9. Legitimate credit counseling agencies are non-profit organizations. Every single one of them.

So…now that you know how to avoid a scam, where can you go for legitimate credit couseling?

REGIONAL Federal Credit Union works with Consumer Credit Counseling Services of Northwest Indiana (http://www.cccsnwi.org/), a non-profit agency. REGIONAL partners with CCCSNWI because they’re trustworthy, and they do exactly what a credit counseling service should do.

You can also find information about legitimate services nationwide from the National Foundation for Credit Counseling (http://www.nfcc.org/). They don’t work with scammers.

As always, before you use any credit counseling service, check them out with the Better Business Bureau (http://www.bbb.org). If they’re not BBB accredited, and if they don’t have a pretty spotless record, look elsewhere.

Personally, I’d never use an agency that had anything less than an “A+” rating.