8/9/2019 Credit Do's and Don'ts

1/4

10 ThingsEvery Consumer Should Know

Department o Business Aairsand Consumer ProtectionNorma I. Reyes, Commissioner

City o ChicagoRichard M. Daley, Mayor

www.cityofchicago.org/bacp

About Credit

8/9/2019 Credit Do's and Don'ts

2/4www.cityofchicago.org/bacp

10 Thingsto know about Credit

1

This booklet will help you understand

your rights when it comes to your

credit and how to avoid becoming a

victim of fraud.

What is credit?

Creditismoneythatalendergivestoaborroweroncon-ditionof repaymentover a certain timeperiod.Peopleobtaincreditthroughvariousformssuchascreditcards,mortgages,orcarloans.erearemanybenetstobuild-ingagoodcredithistoryandobtaininglowcostlinesof

credit.Badcreditcanhappentoanybody,andunfortu-nately,therearethosewhotrytotakeadvantageofpeopleinneedofcredit,orinneedofrepairingdamagedcredit.

Your credit report

Yourcreditreportmaycontaininformationaboutwhereyoulive,howandwhenyoupayyourbills,andwheth-er youve been sued, arrested or led for bankruptcy.Businesses may use this information to evaluate yourapplicationsforcredit.Consumersareentitledtoa freecreditreport,whenrequested,everytwelvemonths,fromeachofthenationwideconsumercreditreportingcom-panies:Equifax,ExperianandTransUnion.Torequestyourfreecreditreportvisitwww.annualcreditreport.comorcalltoll-freeat1-877-322-8228.

Dealing with bad credit

Bad credit takes time to repair, but somecreditrepaircompanieswillmakeclaimsthattheycaneraseyourbadcredit,orgiveyouanewcreditidentity.Consumersshouldbewareoftheseclaimsbecausethey

are typical signsofa scam.e truth is that only thepassage of time can repair credit. Legitimate credit repaircompaniestypicallywillnotmaketheseclaims.Repair-ingyourcreditisattainable,buttherearenoquickxes.Withaconsciouseortandstickingtoapersonaldebtrepaymentplan,acreditreportcanberepaired.Inmostcases,negativeitemsareerasedfromaconsumerscredithistoryafter7years,and10yearsforChapter11bank-ruptcies.

2

3

Know the signs of a credit

repair scam

Beware of companies that:

Claimtheycanridyouofyournegativecreditinfor-mation,eventhoughitisaccurate.

Recommendthatyoudonotcontactanyofthethree

majornationwidecreditreportingcompaniesdirectly,or advise you to dispute all the information in yourcreditreport,eventhoughitisaccurate.

SuggestyoucreateanewcreditidentitybyapplyingforanEmployerIdenticationNumber(EIN)touseinplaceofyourSocialSecurityNumber.

4

5

6

Dos and Donts

TIP: Credit repair companies must register with the Illin

SecretaryofStatebeforeconductingbusiness.Chargingup-frofeesbeforeanyservicesareperformedisnotallowedwithoutliabondwiththeIllinoisSecretaryofState.Onlya few,regulaprofessions can charge up-front fees such as banks, lawymortgageorrealestatebrokers.TocheckifacompanyisregisteandbondedcalltheSecretaryofStateat217-782-7017.

Credit repair companies are re-

quired to provide the following:

Awrittencontractoutliningyourrightsandobligationpaymentterms,adescriptionoftheservicesthecompanwillperform, guarantees,andhow long itwill takeachievetheresult.

AcopyoftheConsumerCreditFileRightsUnderStaandFederalLawbeforeyousignacontract.

Anotice ofcancellation that youmay use tocancecontractwithinthreebusinessdays.

What credit repair companies

cannot do:

Make false claims about their services, such as telliyou that they can remove accurate bad credit from yocredit report.

Performanyservicesuntiltheyhaveyoursignatureonwrittencontract.

Chargeup-frontfeeswithouttheState-requiredbond.

8/9/2019 Credit Do's and Don'ts

3/4www.cityofchicago.org/bacp

Protect yourself from

identity theft

Identity theft is a serious crime and can destroy yo

credit. Tere are no guarantees to avoid identity thbut there are steps you can take to prevent it:

Obtainacopyofyourcreditreportonaregularbas

Shredanypaperworkwithyourpersonalinformatioon it.

Closeanyaccountsthatyouknoworbelievehavebeecompromisedandplacea free90-day fraudalertyourcreditreportbycalling1-888-397-3742.

Reportanylostorstolencheckbooksorcreditcardimmediately.Bylaw,onceyouhavereportedthelo

ortheft,youhavenofurtherobligationforunauthoized charges. Debit cards do not have such protectiastheycanonlybecompromisedifsomeonehasyoPIN or authorization code.

File a police report and get a copy of it, or atminimumthenumberofthereport.iswillhelpyodealwiththecreditorswhoneedproofofthecrime

Filea complaintwiththeFederalTradeCommissibydialing1-877-IDTHEFT.ishelpslawenforment ocials track down identity thieves and stthem.

Disputing inaccurate information

on your credit reportIfyouquestiontheaccuracyofyourcreditreport,youcandisputeitwiththeconsumercreditreportingcom-panyandtheinformationprovideratnocost.Bothareobligatedtoinvestigateyourclaimandareresponsibleforcorrectinginaccurateorincompleteinformation.Besuretosubmityourdisputesinwritingandprovidecopiesofany documents that support your position. Te consumerreportingcompanymustinvestigateandgiveyouresultsinwritingwithin30days.

Dealing with debt collectors

Ifyoufallbehindinrepayingyourcreditors,oranerrorismadeonyouraccounts,youmaybecontactedbyadebtcollector.Debtcollectorshavetotreatyoufairly,andareprohibitedfromcertainmethodsofdebtcollection.

Youcanstopadebtcollectorfromcontactingyoubywritingalettertellingthemtostop.Sendingaletterdoes not erase the debt;however, once the collectorreceivesyourletter,theymaynotcontactyouunlessthecreditorintendstotakelegalactionagainstyou.

Debtcollectorsmaynotharass,oppressorabuseyouoranythirdpartiestheycontact.Debtcollectorsmaynotusethreats,violence,obsceneorprofanelanguage,orrepeatedlytelephonetoannoyyou.

Debtcollectorsmaynotstatethatyouwillbearrestedif you do not pay your debt.

If a debt collector uses any of the above tactics,you should le a complaint with the FederalTradeCommission

7

8

9

Seek reputable credit

counseling assistance

A reputable credit counseling organization can advyouonmanagingyourmoneyanddebtandhelpydevelopabudget.Also,manybanks,creditunions,ansavingsandloaninstitutionsoerfreeeducationalmterialsintheareasofconsumercredit,moneyanddemanagement.Youcanalsondinformationaboutcosumer credit andyourrights fromseveral governmeagencies,suchastheChicagoDepartmentofBusineAairs and Consumer Protection. www.cityofchcago.org/bacp. e Federal Trade Commission ofersinformationonimprovingyourcreditandndilegitimateresourcesforlowornocosthelpbyvisitinwww.ftc.gov/credit.

10

Report fraud by calling 311

8/9/2019 Credit Do's and Don'ts

4/4

Resources

www.cityofchicago.org/bacp

City of ChicagoDepartment of Business Affairsand Consumer Protection

www.cityochicago.org/bacp312-742-7777 Consumer Fraud HotlineTo fle a complaint call 311

To get a Free Credit Report

www.annualcreditreport.com1-877-322-8228

Nationwide Consumer Credit ReportingCompanies:Equiax: www.equiax.comExperian: www.experian.comTrans Union: www.transunion.com

Illinois Secretary of StateIndex Department217-782-7017

Federal Trade Commissionwww.tc.gov/credit1-877-FTC-HELP (1-877-382-4357)TTY:1-866-653-4261

Better Business Bureauwww.chicago.bbb.org1-312-832-0500

Illinois State Attorney Generalwww.ag.state.il.us1-800-386-5438TTY: 1-800-964-3013

Money Management International (MMIConsumer Credit Counseling Service (CCC

www.moneymanagment.org