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10 Things
Every Consumer Should Know
Department o Business Aairsand Consumer ProtectionNorma I. Reyes, CommissionerCity o ChicagoRichard M. Daley, Mayor
www.cityofchicago.org/bacp
About Credit
 
www.cityofchicago.org/bacp
10 Things
 
to know about Credit
1
This booklet will help you understandyour rights when it comes to yourcredit and how to avoid becoming avictim of fraud.
What is credit?
Creditismoneythatalendergivestoaborroweroncon-ditionofrepaymentoveracertaintimeperiod.Peopleobtaincreditthroughvariousformssuchascreditcards,mortgages,orcarloans.erearemanybenetstobuild-ingagoodcredithistoryandobtaininglowcostlinesofcredit.Badcreditcanhappentoanybody,andunfortu-nately,therearethosewhotrytotakeadvantageofpeopleinneedofcredit,orinneedofrepairingdamagedcredit.
Your credit report
 
 Yourcreditreportmaycontaininformationaboutwhereyoulive,howandwhenyoupayyourbills,andwheth-eryou’vebeensued,arrestedorledforbankruptcy.Businessesmayusethisinformationtoevaluateyourapplicationsforcredit.Consumersareentitledtoafreecreditreport,whenrequested,everytwelvemonths,fromeachofthenationwideconsumercreditreportingcom-panies:Equifax,ExperianandTransUnion.Torequestyourfreecreditreportvisitwww.annualcreditreport.comorcalltoll-freeat1-877-322-8228.
Dealing with bad credit
Badcredittakestimetorepair,butsomecreditrepaircompanieswillmakeclaimsthattheycaneraseyourbadcredit,orgiveyouanewcreditidentity.Consumersshouldbewareoftheseclaimsbecausetheyaretypicalsignsofascam.etruthisthatonlythe
passage of time can repair credit. Legitimate credit repair
companiestypicallywillnotmaketheseclaims.Repair-ingyourcreditisattainable,buttherearenoquickxes. Withaconsciouseortandstickingtoapersonaldebtrepaymentplan,acreditreportcanberepaired.Inmostcases,negativeitemsareerasedfromaconsumer’scredithistoryafter7years,and10yearsforChapter11bank-
ruptcies.
23
Know the signs of a creditrepair scam
Beware of companies that:
 
•Claimtheycanridyouofyournegativecreditinfor-mation,eventhoughitisaccurate.
 
•Recommendthatyoudonotcontactanyofthethreemajornationwidecreditreportingcompaniesdirectly,
or advise you to dispute
all
the information in your
creditreport,eventhoughitisaccurate.•SuggestyoucreateanewcreditidentitybyapplyingforanEmployerIdenticationNumber(EIN)touseinplaceofyourSocialSecurityNumber.
456
Do’s and Don’ts
TIP:
CreditrepaircompaniesmustregisterwiththeIllinoisSecretaryofStatebeforeconductingbusiness.Chargingup-frontfeesbeforeanyservicesareperformedisnotallowedwithoutlingabondwiththeIllinoisSecretaryofState.Onlyafew,regulatedprofessionscanchargeup-frontfeessuchasbanks,lawyers,mortgageorrealestatebrokers.TocheckifacompanyisregisteredandbondedcalltheSecretaryofStateat217-782-7017.
Credit repair companies are re-quired to provide the following:
 
• Awrittencontractoutliningyourrightsandobligations,paymentterms,adescriptionoftheservicesthecompany willperform,guarantees,andhowlongitwilltaketoachievetheresult.• Acopyofthe“ConsumerCreditFileRightsUnderStateandFederalLaw”beforeyousignacontract.• Anoticeofcancellationthatyoumayusetocancelacontractwithinthreebusinessdays.
What credit repair companiescannot do:
•Makefalseclaimsabouttheirservices,suchastelling
you that they can remove accurate bad credit from yourcredit report.
•Performanyservicesuntiltheyhaveyoursignatureona writtencontract.•Chargeup-frontfeeswithouttheState-requiredbond.
 
www.cityofchicago.org/bacp
Protect yourself fromidentity theft
 Identity theft is a serious crime and can destroy yourcredit. Tere are no guarantees to avoid identity theftbut there are steps you can take to prevent it:
•Obtainacopyofyourcreditreportonaregularbasis.•Shredanypaperworkwithyourpersonalinformation
on it.
•Closeanyaccountsthatyouknoworbelievehavebeencompromisedandplaceafree90-dayfraudalertonyourcreditreportbycalling1-888-397-3742.•Reportanylostorstolencheckbooksorcreditcardsimmediately.Bylaw,onceyouhavereportedthelossortheft,youhavenofurtherobligationforunauthor-
ized charges. Debit cards do not have such protection
astheycanonlybecompromisedifsomeonehasyour
PIN or authorization code.
•Fileapolicereportandgetacopyofit,orataminimumthenumberofthereport.iswillhelpyoudealwiththecreditorswhoneedproofofthecrime.•FileacomplaintwiththeFederalTradeCommissionbydialing1-877-IDTHEFT.ishelpslawenforce-mentocialstrackdownidentitythievesandstop
them.
Disputing inaccurate informationon your credit report
Ifyouquestiontheaccuracyofyourcreditreport,youcandisputeitwiththeconsumercreditreportingcom-panyandtheinformationprovideratnocost.Bothareobligatedtoinvestigateyourclaimandareresponsibleforcorrectinginaccurateorincompleteinformation.Besuretosubmityourdisputesinwritingandprovidecopiesof
any documents that support your position. Te consumer
reportingcompanymustinvestigateandgiveyouresultsinwritingwithin30days.
Dealing with debt collectors
 
Ifyoufallbehindinrepayingyourcreditors,oranerrorismadeonyouraccounts,youmaybecontactedbyadebtcollector.Debtcollectorshavetotreatyoufairly,andareprohibitedfromcertainmethodsofdebtcollection.• Youcanstopadebtcollectorfromcontactingyouby writingalettertellingthemtostop.Sendingaletterdoesnoterasethedebt;however,oncethecollectorreceivesyourletter,theymaynotcontactyouunlessthecreditorintendstotakelegalactionagainstyou.•Debtcollectorsmaynotharass,oppressorabuseyouoranythirdpartiestheycontact.Debtcollectorsmaynotusethreats,violence,obsceneorprofanelanguage,orrepeatedlytelephonetoannoyyou.•Debtcollectorsmaynotstatethatyouwillbearrested
if you do not pay your debt.
•Ifadebtcollectorusesanyoftheabovetactics,youshouldleacomplaintwiththeFederalTradeCommission
789
Seek reputable creditcounseling assistance
 
 Areputablecreditcounselingorganizationcanadviseyouonmanagingyourmoneyanddebtandhelpyoudevelopabudget.Also,manybanks,creditunions,andsavingsandloaninstitutionsoerfreeeducationalma-terialsintheareasofconsumercredit,moneyanddebtmanagement.Youcanalsondinformationaboutcon-sumercreditandyourrightsfromseveralgovernmentagencies,suchastheChicagoDepartmentofBusiness AairsandConsumerProtection.
 www.cityofchi-cago.org/bacp
.
 
eFederalTradeCommissionof-fersinformationonimprovingyourcreditandndinglegitimateresourcesforlowornocosthelpbyvisiting
 www.ftc.gov/credit.
10
Report fraud by calling 311
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