Avoid this Credit Repair Mistake

It may take a while with a bad credit auto loan but it is a much better choice than bad credit repair fixes such as file segregation

Your car credit repair

If you have poor credit and you think you’ve found a quicker way than a bad credit car loan to establish your car credit, you might want to read on.

That’s because Auto Credit Express has been working with credit-challenged car buyers and reestablishing their car credit for over twenty years. During that time, we’ve personally helped hundreds of retail buyers get financed while helping them avoid a tote the note dealer (buyers outside our area can now fill out a bad credit auto loan application on our web site) as well as advising them about bad credit auto loans (so they don’t end up in repossession).

But it comes to credit repair you need to realize that there are no quick fixes to a bad credit report.

Credit repair

Speaking of quick fixes, for many individuals emerging from bankruptcy, or just trying to raise their credit scores, the idea of repairing their credit quickly and raising their FICO scores through a credit repair agency can be very appealing.

There are companies that promise to cure anyone’s credit woes almost immediately. In some cases, for a fee, they will actually create a new identity for you. This solution, however, can land you in a whole lot of trouble.

It’s called file segregation

Here is how it works: A credit repair company will send out letters addressed to individuals who have recently completed bankruptcy. These letters go something like this: because of a bankruptcy, you will be unable to get a credit card, a personal loan or most other types of credit for 10 years (not true). To prevent this they will, for a fee, hide your bankruptcy by establishing a new identity for you that can be used when applying for credit.

They will then suggest that you apply for an EIN from the Internal Revenue Service. Although an EIN (Employer Identification Number) may look like a social security number, it’s actually an identification number issued to businesses so they can report their financial information to the IRS and the Social Security Administration.

Once you receive your EIN, the credit repair company will tell you to use it instead of your social security number when applying for credit, thus “segregating” your old information from your new credit file.

What the credit repair company won’t tell you is that it’s a crime to obtain an EIN for personal identification. Not only that, but if you use a phone or the mail to apply for one, you could also be charged with mail or wire fraud. In many states this practice is also considered a civil offense.

The Bottom Line

First, beware of companies that promise shortcuts to credit repair. As part of the Credit Repair Organizations Act, it’s illegal for any company to even charge you for repairing your credit until they have performed the service.

Second, follow your instincts: if it sounds too good to be true, it probably is.

Finally, Auto Credit Express has helped thousands of people with bad credit buy cars and reestablish their car credit through a nationwide network of affiliate dealers that specialize in second chance auto loans.

So if you are serious about getting your credit back on track, you can begin the process right now by filling out our secure online bad credit car loan application.

Posted on April 17, 2011 by in Credit Repair, FICO score
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