MINNEAPOLIS (WCCO) - They are companies that claim to clean up your credit -- for a price. But the growing industry of credit repair is surrounded by controversy. WCCO-TV looked into one such business under fire for its business practices in Burnsville.
Complaints against United Credit Consultants have piled up for years. Some clients are suing, saying the company didn't fix their credit scores. and some employees are saying they haven't been paid.
United Credit Consultants' CEO calls the complaints growing pains and says its service works.
If you're one of the millions of people with a poor credit score, you might be wondering what power you have to improve it.
Darryl Dahlheimer is financial services program director at Lutheran Social Service of Minnesota.
"I always feel bad when people are paying for a service that should be just free," Dahlheimer said.
His organization helps consumers understand their credit repair rights. We're all entitled to a free copy of our credit report from the three major credit reporting bureaus each year.
WCCO's Liz Collin said she found problems when she checked it out herself for this story.
"I got a copy of mine and found a mistake," Collin said. "Someone with the same name has an unpaid energy bill."
Mistaken identity cases aren't uncommon. And, overall, one in three people who check their credit reports will find a mistake.
Even something as simple as the wrong credit limit on some of your cards can throw off your score.
"It's up to us to fix it," Dahlheimer said. "That's the key takeaway."
The law allows anyone to request their information directly and dispute mistakes for themselves.
"The Fair Credit Reporting Act is a great law we have in this country that helps people fix their own credit for free and pretty easily," Dahlheimer said.
The Minnesota Department of Commerce regulates the credit repair business. Right now, a dozen are allowed to sell their services in the state.
Commissioner Mike Rothman has had to take action before.
"We have found there are companies out there to just scam people," Rothman said.
Five credit repair companies have been fined for practicing without a license in recent years.
"They are seeking help from these companies, and they should not be exploited or taken advantage of," Rothman added.
Rothman believes it's best to sign up with a non-profit to avoid the cost, but if you do decide on paying someone, he says you'll want to do your homework first.
"We want to make sure those consumers are properly protected," Rothman said.
If a consumer has had trouble with a credit repair business in the past, the Minnesota Department of Commerce wants to know about it. If you've had an issue with U.C.C., or another credit repair company, you can file a complaint by clicking here.
To fix your credit score, the commerce department has a number of resources, including banking and finance tips, credit counseling services and credit report information. They also have a list of known debt collections scams.
The department is available if you have questions about insurance, a financial product or service, or believe you have been the victim of a scam or fraud. Report the fraud so that others do not fall victim. If you think you have been a victim, contact the Consumer Services Center at 651-539-1600 or 800-657-3602.
Complaints can also be sent by email to firstname.lastname@example.org or by mail to Minnesota Department of Commerce, 85 7th Place East, Suite 500, Saint Paul, MN 55101.
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