Q. Can I trust the debt-settlement firms who claim can fix my credit reports?
A. The truth is that no person or company can remove accurate entries from your credit report.
The Fair Credit Reporting Act says that information about a delinquent account (late payments, nonpayments) can remain on your file with the credit reporting agencies for seven years, starting 180 days after the account becomes delinquent.
Many so-called debt-settlement firms leave consumers worse off than when they came to the firms for help. According to the Department of Justice, only one person in 10 who goes to such companies emerges debt-free. The rest wind up deeper in debt and with worse credit scores than they had, because the companies charge them high fees to set up an account, then monthly fees, and sometimes the companies take some of the money that was supposed to be used to repay the debt.
Some of these outfits tell you to stop paying your bills, claiming that companies won’t negotiate with you while you’re still making payments. Don’t believe those statements. Not making payments will only cause you to incur more fees, higher interest rates — and lawsuits.
To find a list of legitimate, government-approved credit counseling organizations, visit usdoj.gov/ust.
A. The truth is that no person or company can remove accurate entries from your credit report.
The Fair Credit Reporting Act says that information about a delinquent account (late payments, nonpayments) can remain on your file with the credit reporting agencies for seven years, starting 180 days after the account becomes delinquent.
Many so-called debt-settlement firms leave consumers worse off than when they came to the firms for help. According to the Department of Justice, only one person in 10 who goes to such companies emerges debt-free. The rest wind up deeper in debt and with worse credit scores than they had, because the companies charge them high fees to set up an account, then monthly fees, and sometimes the companies take some of the money that was supposed to be used to repay the debt.
Some of these outfits tell you to stop paying your bills, claiming that companies won’t negotiate with you while you’re still making payments. Don’t believe those statements. Not making payments will only cause you to incur more fees, higher interest rates — and lawsuits.
To find a list of legitimate, government-approved credit counseling organizations, visit usdoj.gov/ust.
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