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Advertisements by companies promising to "fix your credit score" are in newspapers, in your mailbox, and on the internet. How many times have we seen the line, "We can erase your bad credit"? No matter how bleak your credit report may seem, don't believe those statements. There's only one road to take in order to clear bad credit: Create a personal debt repayment plan, stick to it, and be patient.

Be warned

These "credit repair" companies understand basic human psychology: When we feel trapped and hopeless, we become vulnerable. Once in that state of mind, the promise of credit repair becomes exceedingly tempting. But crossing that line may only bring about another debt – to that company.

If you choose to respond to a credit repair offer, beware of companies that:

• Tell you to pay up front before any service is provided.
• Tell you to dispute everything in your credit report.
• Do not take the time to inform you of the steps you can take on your own for free.
• Do not advise you of your legal rights.
• Do not provide a written and dated contract.

Your rights

It is illegal for credit repair companies to:

• Represent that they can change or make an improvement to a client's credit report prior to examining the report.
• Secure a payment or charge a fee unless their services can cause an improvement to the client's credit file.
• Take advance payment for service.
• Make false or misleading claims. It's important to remember that no credit repair company has the power to change or erase accurate information.

Know the truth

No one can legally remove accurate information from a credit report, it's that simple! Once a credit report is damaged, only time will help "lessen the blow."  Here are some tips that you can take to help your credit, no matter how marred it is with past mistakes:

• Pay your bills on time.
• If you must pay late, let the creditor know. Many creditors will not relay this information to the credit reporting agencies if you let them know how quickly (within reason) you will make a payment. Not communicating with your creditor and avoiding those "reminder" phone calls can only cause further harm.
• Avoid running up your credit card to the limit. Keeping your balance well below your available credit limit will help your credit score.
• No matter how great the temptation, don’t apply for credit unless you absolutely must have a new account. Too many applications in a brief time period may indicate to lenders that you are having financial difficulties or overextending yourself by taking on more debt than you can repay. It is important to note that you are not penalized if you are shopping around for the best mortgage rate or a loan to purchase a new car, though.

Remember to dispute inaccurate information

You are permitted by law to dispute any information in your file you feel is inaccurate. There is no charge for disputing incorrect information on your report. Also keep in mind that you are legally entitled to a free copy of your credit report, which is referred to as a Consumer Disclosure. To ge t the best view of your complete credit history, get your free report from both TransUnion and Equifax, the two largest credit reporting agencies in Canada.

Free Service  Call (416) 873-6660 Tom Stolecki Mortgage Agent, Lic. # M08009118