For Immediate Release - July 19, 2010

AG Coakley Cautions Consumers to do Their Homework on Credit Repair Companies


In light of recent cases brought by her office, Attorney General Martha Coakley has issued the following consumer advisory to help people protect themselves when dealing with credit repair companies. AG Coakley reminds consumers that they can monitor their credit reports on their own, and that they should be cautious of any for-profit credit repair company that attempts to charge advance fees, guarantees certain results, or claims to be able to remove all the negative information on a credit report.

"Due to the current state of the economy, many people have unfortunately continued to build up debt on their credit cards," said Attorney General Coakley "Credit pressures are mounting, and unscrupulous businesses will prey on the fact that consumers are in a vulnerable economic situation. Consumers can take the first step to protect themselves by requesting a free copy of their credit report and demanding the correction of any inaccurate information."

Under federal law, credit bureaus are not required to remove negative information from your credit report unless it is inaccurate or more than seven years old, or ten years old for bankruptcies. Consumers should not be misled by credit repair companies which make claims about fixing their credit that are simply too good to be true. Not only are these companies charging fees for something consumers can do for free, but if they ask consumers to pay a fee up front, before they achieve results, they are violating state and federal law.

The Attorney General advises the following if you are having credit problems:

  • Obtain a free copy of your credit report directly from the credit bureaus.
  • If you see inaccurate information on your credit report, contact the credit bureau directly to request a correction.
  • Contact your creditors immediately if you are having trouble making payments.
  • Determine a monthly payment that you can and will make. Many creditors will try to work out a suitable payment schedule if they believe you are acting in good faith.

If consumers continue to have problems in reducing their debt, they may want to seek assistance from a credit services organization to provide advice or negotiate on their behalf to try to reduce their credit balances. A for-profit company providing these services may not charge up-front fees for such services.

If, however, a consumer wants assistance in creating a debt management plan, whereby the consumer makes an agreed-upon monthly payment to the credit counselor, who periodically distributes the money to the consumer's creditors, that credit counselor must be either a licensed attorney or a nonprofit organization.

Consumers seeking to hire someone for any kind of credit services should check references and only hire a reputable attorney or entity.

Consumers interested in monitoring or improving their credit should follow the guidance provided on the Federal Trade Commission website, (search for "Credit Repair How to Help Yourself" or click here.) The FTC website includes a sample letter that consumers can use to challenge inaccurate information on their credit report. Some credit bureaus also allow consumers to dispute credit report inaccuracies directly on the credit bureau website.

Federal law provides that all individuals are entitled to one credit report from each credit bureau free of charge once every 12 months. Consumers can request their free annual credit report online at, or by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form (available online) and mailing it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

In addition to a free annual credit report, if a consumer is subject to any adverse action, such as a denial of credit, due to information in your credit report, the person or entity initiating the action must identify the credit bureau or bureaus that provided the credit reports. Consumers have a right to request a copy of their credit report from those bureaus.

For additional information on dealing with credit problems, or to file a complaint about a credit repair company, log onto the Attorney General's website or call the consumer hotline at (617) 727-8400.