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By Kathy Gurchiek
The Salt Lake Tribune

Your car is kaput. Your bills are mounting -- maybe even late -- and a black cloud hangs over your credit. You are desperate to buy a car or house, but that requires good credit.
Your panic can make you a prize victim of unscrupulous credit repair companies, says John Ventura, author of The Credit Repair Kit (Dearborn Trade Publishing, $18.95).
Unlike companies that consolidate consumers' bills and handle bill payment, credit repair companies help consumers resolve problems with their credit records and rebuild their credit.
Do not succumb to the temptation to hire such a company, says Lester A. Perry, an attorney at the Salt Lake City firm of Hoole & King.
Although not prevalent, unscrupulous credit repair companies exist in Utah, he says, and it is better to handle credit repair yourself.
Start by obtaining a copy of your credit report from one of the three national credit bureaus -- Equifax, Experian and TransUnion -- to clear up inaccuracies and see where you need to improve your credit score. There is a fee for the report, although exceptions are made in some circumstances.
"[Consumers] have to be the ones to do the work," says Judson Pitts, also of Hoole & Kings. They have more power than they realize. Under the law, for example, credit bureaus do not have to respond to attorneys challenging credit report inaccuracies, he says, but they must respond to the consumer.
Consumers need to understand rebuilding credit takes time, Ventura says.

"There is a legal path to credit rebuilding. What [some people are] looking for is a quick fix, and there's a multitude of people out there willing to tell them they can fix [their poor credit] immediately for money."
For those who feel they need a credit repair company's help, Ventura advises watching for red flags:
* A company suggests "file segregation." The consumer is asked to use something other than a Social Security number to create a new identity as a way to obtain credit or a loan, Ventura points out.
"It's an attempt to try to fool the credit bureau's file and make them think you're a completely different person."
* A company asks for payment before services are render- ed or makes extravagant promises, such as wiping out bankruptcy from your credit report. A legitimate debt cannot be removed from a credit report with the snap of a finger, says Pitts, and a bankruptcy may stay on your record for 12-16 years.
* A company tactic is to abuse a part of the Fair Credit Reporting Act. The law allows consumers to challenge any information in their credit report they think is inaccurate; if a credit bureau cannot verify within 30 days whether the disputed information is correct it must immediately delete the information, Ventura says.
Some firms inundate credit bureaus with repeated and numerous challenges whether the information is accurate or not. These companies do not tell consumers that by challenging everything, "credit bureaus can ignore [the challenge] and will ignore it," Ventura says.
* A company does not provide a three-day cancelation period before it begins providing its services.
* A company does not tell consumers they can do their own credit repair.
kgurchiek@sltrib.com

If you are victimized by a credit repair company . . .

* Contact the Utah Division of Consumer Protection at 530-6601, http://www.consumerprotection.utah.gov or http://www.dcp.utah.gov.

* Consumers also may contact the National Association of Consumer Advocates at http://www.naca.net or 202-452-1989. The nonprofit clearinghouse provides names of attorneys in your state who have experience prosecuting credit repair firms.

* Another source is the National Consumer Law Center at http://www.consumerlaw.org or 617-542-8010.

-- If you are a victim of an unscrupulous credit repair company ...
Contact the Utah Division of Consumer Protection at 530-6601, www.consumerprotrection.utah.gov or www.dcp.utah.gov.
Consumers also may contact the National Association of Consumer Advocates at http://www.naca.net or (202) 452-1989. The nonprofit clearinghouse provides names of attorneys in your state who have experience prosecuting credit repair firms.
Another source is the National Consumer Law Center at http://www.consumerlaw.org or (617) 542-8010.

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