The National Consumer Law Center warns heartily against “credit repair” scams.

The NCLC debunks the “credit repair” claims:

– “We can erase bad credit” – The truth is that no one can erase bad credit information from your report if it is truthful and accurate.

– “Only we can remove old or inaccurate information” – this is untrue because you can correct any old or inaccurate information yourself. There is no reason to pay a huckster to do it for you.

-“We will erase even accurate poor credit history information, even if it is accurate” – Lying to a credit report agency is illegal.

If you have been hoodwinked into a “credit repair” scam, here is a few things you should know.

First, you may have some protections. Federal laws and some state laws require credit repair companies to provide mandatory disclosures before you sign up.

Second, the credit repair company is not allowed to provide any services to you until three days after you sign a written and dated contract.

Third, the credit repair scam is not allowed to charge you in advance under certain laws.

Fourth, you have a right to cancel the credit repair scam contract without giving any reason (do it in writing!) within three days of signing the written contract.

A collection agency pressuring you to pay under threat of making a negative credit report entry is a hollow threat. Under arrangements that the collection agency likely has with the credit reporting agency (or agencies) they are required to make a report every month anyway. So do not give away your last dollar to a threatening collection agency in order to “save” your credit report from “damage”. The negative credit history is likely to be reported to the credit reporting company anyway under the reciprocity requirements between the credit report company and the collection agency.