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Financial Literacy - Credit scores
Fixing errors on your credit reports
Take these steps to purge inaccuracies and old data from your credit report.
Credit scoring, demystified

Correcting credit reports

5 ways to dispute errors
The Credit Repair Organizations Act requires firms to provide you with a statement of rights, a written contract and a three-day waiting period in case you change your mind. Be sure to read the contract and know what you're paying for and whether you want them to do this.

There are some obvious scams claiming that you can create a new credit identity or remove negative accurate information from a file. Being in a bad financial situation can make you feel desperate, but participating in these scams is illegal and could leave you in a much worse place than where you started.

Read up on your consumer rights.

3. Sign up with a credit counselor
Not all credit counselors have your best interests at heart, so choose your counselor carefully. A lot of counselors claim to be nonprofit, but they are not in the strictest sense of the word, warns Kuehn.

"Reputable companies will get you free information about themselves, their services and a free initial session. Check them out with the state attorney general, your local consumer protection agency or the Better Business Bureau."

The U.S. Trustee program lists credit counseling companies that are approved for pre-bankruptcy counseling. Find a Department of Justice-approved counselor in your state. Make sure to understand the FTC credit counseling guidelines.

4. Hire an attorney
Attorneys can help throughout the entire dispute process, but most people can handle the initial round of disputes on their own. However, it's imperative to file directly with a credit bureau. "If you don't do it this way, you don't preserve your right to file a lawsuit," says James B. Fishman, a New York consumer rights and privacy advocate who has brought numerous groundbreaking cases under the Fair Credit Reporting Act, or FCRA.

If the error doesn't get fixed with a letter, you may want to dispute it again with more information if you've got it. Your only other option is to file a lawsuit. Don't hesitate to contact a lawyer at this point. "Most lawyers would take the case on a contingency basis because the FCRA has a lawyer fee written in," says Fishman. "Most lawyers who do this work don't do it on an hourly basis."

-- Posted: June 18, 2007
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