Contact both the credit reporting agency and the company that provided the information to the Credit Reporting Agency (CRA).

Tell the CRA in writing what information you believe is inaccurate.

Under The Fair Credit Reporting Act, the information provider is required to investigate and report the results to the CRA. If the information is found to be incorrect, it must notify all nationwide CRAs to correct your file. If the investigation does not solve your dispute, ask that your statement concerning the dispute be included in your file. A notice of your dispute must be included anytime the CRA reports the negative item.

If the information is accurate, only time, hard work, and a personal debt repayment plan will improve your credit report. Credit repair companies advertise that they can erase bad credit for a hefty fee. Don't believe it.

Under the Credit Repair Organizations Act, credit repair companies can't require you to pay until they have completed promised services. They must also give you:

- a copy of the "Consumer Credit File Rights Under State and Federal Law" before you sign a contract;

- a written contract that spells out your rights and obligations; and

- three days to cancel without paying any fees.

- Some credit repair companies promise to help you establish a whole new credit identity. You can be charged with fraud if you use the mail or telephone to apply for credit with false information. It is also a federal crime to make false statements on a loan or credit application, to give a false Social Security number, or to obtain an Employer Identification Number from the Internal Revenue Service under false pretences.

If you have lost money to a credit repair scam, contact your state or local consumer affairs office or the National Fraud Information Center.

Out of Control Debt

Counseling services are available to help people having trouble budgeting money and paying bills. Credit unions, cooperative extension offices, military family service centers and religious organizations are among those that may offer free or low-cost credit counseling.

Local, nonprofit agencies that provide educational programs on money management and help in developing debt payment plans operate under the name Consumer Credit Counseling Service (CCCS). They are members of the National Foundation for Consumer Credit (NFCC). To locate the agency closest to you, call 1-800-388-2227 or visit www.nfcc.org.

Several national nonprofit organizations also provide information and assist people with debt problems via the phone and Internet.

American Consumer Credit Counseling.

InCharge Institute of America.

Money Management International.

Myvesta.

Typically, a counseling service will negotiate lower payments with your creditors, then make the payments using money you send to them each month. The cost of setting up this debt-management plan is paid by the creditor not you. Ask these questions to find the best counselor for you:

What services do you offer? Look for an organization that offers budget counseling and money management classes as well as a debt-management plan.

Do you offer free information? Avoid organizations that charge for information or make you provide a lot of details about your problem first.

What are your fees? Are there set-up and/or monthly fees? A typical set-up fee is $10. If you're paying a lot more, you may be the one who's getting set up.

How will the debt management plan work? What debts can be included in the plan and will you get regular reports on your accounts?

Can you get my creditors to lower or eliminate my interest and fees? If the answer is yes, contact your creditors to verify this.

What if I can't afford to pay you? If an organization won't help you because you can't afford to pay, go somewhere else for help.

Will you help me avoid future problems? Getting a plan for avoiding future debt is as important as solving the immediate debt problem.

Will we have a contract? All verbal promises should be in writing before you pay any money.

Are your counselors accredited or certified? Legitimate credit counseling firms are affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

Unfortunately, honest credit counselors have a lot of rivals who are more interested in taking your money than helping you. They can do more harm than good. Red flags are:

Big upfront fees. A reputable credit counseling agency will send free information about itself and the services it provides without requiring you to provide any details about your situation.

Unrealistic promises. Some companies falsely claim they can solve problems for pennies on the dollar or remove negative information from your credit record.

Check with your local consumer protection agency and the Better Business Bureau to see if any complaints have been filed about the company.