Don't be fooled by the come-ons. According to the Federal Trade Commission - you see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services.

They all make the same claims:

* Credit problems? No problem!

* We can erase your bad credit - 100% guaranteed.

* Create a new credit identity - legally.

* We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!

Do yourself a favor and save some money, too. Don't believe these promises. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.

Most of the steps for improving your credit you can do yourself. Follow this negotiation cycle when dealing with a creditor.

1. Contact the creditor by phone and reach a tentative agreement.

2. Send the creditor a settlement agreement, requesting return of a signed copy.

3. Upon receipt of a signed copy, send a money order marked "Full Payment."

4. Order a credit report from the credit bureau to ensure the item is changed or deleted as agreed.

5. If your credit report is unchanged, send the creditor a letter demanding compliance with the agreement.

Your bargaining power in this technique is your willingness to repay your creditor the money that you owe him. If the account has already been charged off or discharged in bankruptcy, your leverage will be even greater. At this point, the creditor has already accepted a loss on your account, and he does not expect to ever see or hear from you again. When he hears that you are now willing to repay the debt (or even a percentage of the debt), he'll be anxious to work with you.

You should expect to repay your creditor from 70 percent to the full amount to have it removed or to change the negative credit rating. However, if you expect to settle at 70 percent or less, you should start by offering around 40 percent. You will also lose some of your bargaining power if the balance on the account is under $200, as the creditor may not even want to waste his time with it.

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Did you know?

If you need to work on your credit report, the FTC warns that no one can legally remove accurate and timely negative information from a credit report. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete.

There is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost. According to the Fair Credit Reporting Act (FCRA).

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In many cases, the initial person with whom you begin negotiating does not have the authority to enter into a settlement agreement, especially since it involves changing your credit rating. It is important, therefore, that you talk directly to someone who is in a position to authorize the final agreement.

Another obstacle you may face is that many of these collection officers will tell you that it is impossible (or illegal) to change your credit rating. Therefore, it is often necessary for you to explain to them what you want and how it can be done. The creditor can use the following methods to change or delete credit information on your file:

* All creditors who subscribe to one of the major credit bureaus use a nine-track computerized magnetic tape to report their clients' payment histories. They send this tape to the bureau on a monthly basis. Therefore, you can request that they change the information on this tape after they receive your payment. You may also ask them to delete the account from the tape.

* The creditor can also "bull's-eye" your account. This is an instant method of credit file correction, which is accomplished through the creditor's computer link to the credit bureau. The creditor has the capacity to pull up your account on the computer and make the necessary change automatically. By using a change of information slip, the authorized person can send the corrected information to the data acquisition department of the credit bureau and your file will be updated.

* The creditor can also change the information by submitting a manual update form to the consumer relations department of the credit bureau. With this method, the creditor can delete negative information but cannot change the rating from negative to positive.