# Pros and Cons of 'Credit Cleaning'? **URL:** \ **Category:** Factual Questions\ **Created:** [November 25, 2006, 11:55pm UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799 "2006-11-25T23:55:16Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![FormerMarineGuy](https://avatars.discourse-cdn.com/v4/letter/f/65b543/32.png) [@FormerMarineGuy](https://boards.straightdope.com/u/FormerMarineGuy)\ **Post date:** [November 25, 2006, 11:55pm UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/1 "2006-11-25T23:55:16Z")
As many of you know, I am in the car business. I have a pretty good understanding on how the major credit reporting agencies work and operate and a basic understanding on what credit cleaning is. Recently, there was a Gypsy couple in here who straight-forwardly told me that their credit was cleaned a few months ago. They were both in their 40’s and only had a credit history of 1 year, with a car loan and one credit card. They have had their SSN for about 15 years, so this raises a red flag with most major finance companies. However, I figured their 650 beacon with limited history must be better than having whatever they had before. I have always instructed clients with a bad credit history to not have their credit wiped, for numerous reasons. But I am sure that it has it’s pro’s and con’s. But perhaps I am missing out on something. Does anyone here have any knowledge on how it works? For example, if someone has three repos, ten chargeoffs, and a foreclosure, can they really start from new (not talking about creating a new SSN either)? What are the pros and cons of doing so? ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [November 25, 2006, 11:58pm UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/2 "2006-11-25T23:58:46Z")
> [@](#): > > Steve Baker, Director of the Federal Trade Commission in Chicago, says a prevailing myth about credit repair is that there are loopholes in the federal law that allows poor credit to be erased. It doesn’t exist. > > He says that in the past four years the FTC has not seen a legitimate credit repair clinic. “It’s possible that these clinics are providing legitimate services to customers, but I’ve not seen it yet. When the law says that bankruptcy remains on your credit report for 10 years, just how can it be legally removed?” questions Baker. “And, later when you’re asked in a credit application if you’ve ever filed for bankruptcy, will you lie?” > **[Personal Finance Advice and Information | Bankrate.com](https://www.bankrate.com/personal-finance/)** > > Control your personal finances. Bankrate has the advice, information and tools to help make all of your personal finance decisions. > [@](#): > > The Scam > > Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money. [http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm](http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm) ---
**Author:** ![FormerMarineGuy](https://avatars.discourse-cdn.com/v4/letter/f/65b543/32.png) [@FormerMarineGuy](https://boards.straightdope.com/u/FormerMarineGuy)\ **Post date:** [November 26, 2006, 12:04am UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/3 "2006-11-26T00:04:26Z")
[QUOTE=Gfactor] [http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm](http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm) The Scam Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money. [/QUOTE] I have heard that there are a lot of scams out there. However, I have seen it with my own two eyes. I used just this one example, but on numerous occasions have seen people get either a few things ‘wiped’ or a total cleaning of their credit. ---
**Author:** ![Otto](https://avatars.discourse-cdn.com/v4/letter/o/bbe5ce/32.png) [@Otto](https://boards.straightdope.com/u/Otto)\ **Post date:** [November 26, 2006, 12:08am UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/4 "2006-11-26T00:08:06Z")
Is this so-called “credit cleaning” anything other than disputing items that appear on one’s credit report? Because anyone can do that for themselves for free. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [November 26, 2006, 12:08am UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/5 "2006-11-26T00:08:13Z")
[QUOTE=FormerMarineGuy] I have heard that there are a lot of scams out there. However, I have seen it with my own two eyes. I used just this one example, but on numerous occasions have seen people get either a few things ‘wiped’ or a total cleaning of their credit. [/QUOTE] Most likely they’ve paid lots of money for fraudulent docs. How did you verify that they’ve had the same SSN for fifteen years? ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [November 26, 2006, 12:22am UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/6 "2006-11-26T00:22:45Z")
[QUOTE=FormerMarineGuy] I have heard that there are a lot of scams out there. However, I have seen it with my own two eyes. I used just this one example, but on numerous occasions have seen people get either a few things ‘wiped’ or a total cleaning of their credit. [/QUOTE] You’ve seen before-and-after credit reports? What time frame? Were the items removed legitimate or honestly disputed? > [@](#): > > No one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. [http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm](http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm) The key word here is legally. As others have said, certainly you can falsely dispute a debt. Sometimes that works. It’s not legal, though. I know some people who do more legitimate credit repair, which involves deciding which debts to pay off first and disputing false information from the report. It involves some other stuff, too, but it’s not the overnight, magic result that is touted by the phonies. There is also [rapid rescoring](http://moneycentral.msn.com/content/Banking/Yourcreditrating/P38050.asp), which is different. ---
**Author:** ![FormerMarineGuy](https://avatars.discourse-cdn.com/v4/letter/f/65b543/32.png) [@FormerMarineGuy](https://boards.straightdope.com/u/FormerMarineGuy)\ **Post date:** [November 26, 2006, 12:31am UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/7 "2006-11-26T00:31:09Z")
[QUOTE=friedo] Most likely they’ve paid lots of money for fraudulent docs. How did you verify that they’ve had the same SSN for fifteen years? [/QUOTE] We can verify activity on social security numbers here using creditcommander. ---
**Author:** ![According\_to\_Pliny](https://avatars.discourse-cdn.com/v4/letter/a/8e7dd6/32.png) [@According\_to\_Pliny](https://boards.straightdope.com/u/According_to_Pliny)\ **Post date:** [November 26, 2006, 1:19am UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/8 "2006-11-26T01:19:39Z")
One of the best explanations I’ve found is probably at a library near you. It’s the Nolo Press book\* Credit Repair\* by Robin Leonard, Shae Irving (Editor) ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [November 26, 2006, 1:45am UTC](https://boards.straightdope.com/t/pros-and-cons-of-credit-cleaning/381799/9 "2006-11-26T01:45:59Z")
[QUOTE=According to Pliny] One of the best explanations I’ve found is probably at a library near you. It’s the Nolo Press book\* Credit Repair\* by Robin Leonard, Shae Irving (Editor) [/QUOTE] Here is a copy of the table of contents: [QUOTE=Table of Contents from the Book] [Chapter 4] Cleaning Up Your Credit File A. The Contents of a Credit Report …4/3 1. Personal Information …4/3 2. Accounts Reported Monthly …4/3 3. Accounts Reported When in Default …4/3 4. Public Records …4/4 5. Inquiries …4/4 6. Investigative Reports …4/5 B. Get a Copy of Your Credit Report …4/5 7. How Much Does a Credit Report Cost? …4/5 8. From Which Company Should I Get My Credit Report? …4/6 C. Review Your Credit Report …4/7 9. Review Sample Credit Reports …4/8 10. Combined Reports …4/8 11. How Long Items Can Stay in a Credit Report …4/9 12. Review Your Report …4/10 D. Dispute Incomplete and Inaccurate Information in Your Credit File …4/11 E. Consider Adding a Brief Statement to Your Credit File …4/14 F. Add Positive Account Histories to Your Credit File …4/16 G. Add Information Showing Stability to Your Credit File …4/16 H. Avoid Identity Theft …4/17 13. What’s in a Stolen Name? …4/17 14. How Can an Identity Be Stolen? …4/17 15. How to Protect Yourself …4/18 16. Protecting Your Social Security Number …4/19 17. If Your Identity Is Stolen …4/20 18. Identity Theft Protection Products and Insurance …4/23 [/QUOTE] Many companies that offer this service violate the Credit Repair Organizations Act: [http://www.ftc.gov/os/statutes/croa/croa.htm](http://www.ftc.gov/os/statutes/croa/croa.htm) The act prohibits them from: > [@](#): > > charg[ing] or receiv[ing] any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed. It also prohibits them from lying to the consumer or creditors, and requires the following disclosure to be provided separately from all other materials: > [@](#): > > 'Consumer Credit File Rights Under State and Federal Law > > You have a right to dispute inaccurate information in your credit report by contacting the credit bureau directly. However, neither you nor any ‘‘credit repair’’ company or credit repair organization has the right to have accurate, current, and verifiable information removed from your credit report. The credit bureau must remove accurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for 10 years. > > You have a right to obtain a copy of your credit report from a credit bureau. You may be charged a reasonable fee. There is no fee, however, if you have been turned down for credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days. The credit bureau must provide someone to help you interpret the information in your credit file. You are entitled to receive a free copy of your credit report if you are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of public welfare assistance, or if you have reason to believe that there is inaccurate information in your credit report due to fraud. > > You have a right to sue a credit repair organization that violates the Credit Repair Organization Act. This law prohibits deceptive practices by credit repair organizations. > > You have the right to cancel your contract with any credit repair organization for any reason within 3 business days from the date you signed it. > > Credit bureaus are required to follow reasonable procedures to ensure that the information they report is accurate. However, mistakes may occur. > > You may, on your own, notify a credit bureau in writing that you dispute the accuracy of information in your credit file. The credit bureau must then reinvestigate and modify or remove inaccurate or incomplete information. The credit bureau may not charge any fee for this service. Any pertinent information and copies of all documents you have concerning an error should be given to the credit bureau. > > If the credit bureau’s reinvestigation does not resolve the dispute to your satisfaction, you may send a brief statement to the credit bureau, to be kept in your file, explaining why you think the record is inaccurate. The credit bureau must include a summary of your statement about disputed information with any report it issues about you. > > The Federal Trade Commission regulates credit bureaus and credit repair organizations. For more information contact: > > The Public Reference Branch > Federal Trade Commission > Washington, D.C. 20580’. The Act covers > [@](#): > > any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or represent that such person can or will sell, provide, or perform) any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of– > > ``` > (i) improving any consumer's credit record, credit history, or credit rating; or > > (ii) providing advice or assistance to any consumer with regard to any activity or service described in clause (i); > > ``` but excludes non-profits, banks, and creditors when they are restructuring debts that the consumer owes to them.