Ignoring your problems may seem like the path of least resistance, but in the end it is much more painful, and will cost you thousands of extra dollars when it come times to get a loan on a house, car or other major purchase.

In our very first Credit Professor Radio show, host Lee Rodrigues talks to credit expert Regis Sauger about why you should fight back.

The show aired live on Wednesday, March 11 from 4-5PM PST (7-8PM EST) at http://www.blogtalkradio.com/Credit-Professor, and you can listen to the archived version here:

[podcast]http://getoutofcreditprison.com/wp-content/uploads/CPRadio-2009-03-26.mp3[/podcast]

This week’s Credit Professor Radio show topics:

How to negotiate your debts.

Make sure you open the letters from bill collectors — they’re funny!

The “Rule of 72“, and why banks don’t want you to have good credit.

The Federal Reserve System, and how we’ve all been brainwashed.

Your creditors don’t even have to come to your door to steal money from you.

How many credit repair services work.

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These days you really have to be on your guard – from dubious foreclosure saviors to nasty bill collectors trying to trick you into paying money that you don’t legally owe.

But did you know that Experian, one of the three major Credit Reporting Agencies, has a scam of its own?

One Free Annual Credit Report

As many people know, the Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – Experian, TransUnion, and Equifax – to provide a free copy of your credit report, at your request, once every 12 months. It’s important to check your credit report once a year for accounts you don’t recognize, which can alert you to identity theft, and discrepancies that can affect your credit score, which often result from errors or fraud by ethically-challenged bill collectors.

Here’s what you may not know: by federal law, the only regulated source for obtaining these annual free credit reports is AnnualCreditReport.com. There are three ways to request your report:

• go to the AnnualCreditReport.com web site
• call 1-877-322-8228 toll-free
• fill out a request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281

Not All Free Reports Are Truly Free

When I Googled “free credit report,” the #1 listing was the Federal Trade Commission-approved AnnualCreditReport.com described above. The #2 listing was FreeCreditReport.com — which is an imposter site created by Experian.

If you order your “free” report through FreeCreditReport.com, Experian will automatically enroll you in a credit monitoring service that charges a monthly fee. Here’s the fine print on their site that you may not catch:

“When you order your free report here, you will begin your free trial membership in Triple Advantage(sm) Credit Monitoring. If you don’t cancel your membership within the 7-day trial period, you will be billed $12 for each month that you continue your membership.“

Does a 7-day trial period give you enough time to really try the service? And how easy is it to cancel once they’ve started to bill you? How did this happen?

On the Master Your Card blog, Mike summed it up well:

“In 2004, the U.S. Congress ordered the three major credit bureaus – Experian, Equifax, and TransUnion – to craft a website to allow consumers to order their credit reports online for free, once per year.

Not long after, Experian realized the legislation presented a clever, untapped marketing opportunity. They launched FreeCreditReport.com with the (obvious) hope that unsuspecting consumers wouldn’t know the difference between their not-so-free site and Congress’ mandated, free alternative.

Consumers have since been inundated on television, in print and, of course, online with ads for the FreeCreditReport.com website. That sing-song jingle (“Freeeeee Credit Report … dot.com!”) alone should be a crime, but that’s another topic for another day.”

What happens once you’re in their trap? There are many stories online of consumers who found that “unsubscribing” from Experian’s Triple Advantage program required months of phone calls, e-mails, and online forms.

Battle Of The Free Credit Report Bands

The FTC has received so many complaints about FreeCreditReport.com that they recently launched two of their own hipster videos with catchy tunes.

From the FTC press release:

“The new videos highlight the differences between AnnualCreditReport.com and those other sites that claim to provide ‘free’ credit reports. Other sites require users to pay hidden fees or agree to additional services. For example, some sites provide a free credit report if you enroll in a new service. If you don’t cancel the service during a short trial period, you’re likely to see membership fees on your credit card statement.”

You can watch the FTC spoof videos here:

Restaurant

Apartment

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Photo by PunkJr

Are you being hounded by collectors? Is the bank threatening foreclosure? Do you have judgments on your credit report?

Studies show that these financial stresses may hurt more than just your credit score!

Debt Stress Can Literally Make You Sick

According to an Associated Press-AOL Health poll, people who reported high levels of debt stress are more likely to suffer from certain illnesses, including:

• ulcers or digestive tract problems
• migraines and other headaches
• severe anxiety
• severe depression
• heart attacks
• muscle tension, including pain in the lower back

People who reported high stress also were much more likely to have trouble concentrating and sleeping, and were more prone to getting upset for no good reason.

Feel Better Starting Today

Are you ready to make the pain go away? Then you need to make a commitment to yourself to start tackling that mountain of debt. It may be daunting, but the rewards are great.

Regis Sauger, author of Get Out Of Credit Prison, tells his readers to take a deep breath, and remember that you only have to do it one step at a time.

“Look at the big picture. You have a big job ahead of you, but look at it as part of a larger financial planning program.

Staying focused on your long-term objective will help keep you from becoming discouraged should you lose a battle here or there. There are many battles in any war; you don’t have to win them all to emerge as the winner.”

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Photo by The Shopping Sherpa

Cleaning up your credit report can take a lot of time, perseverance and creativity.

So what about all of those credit repair businesses out there, promising to clean up your credit report for a fee? Is it worth it? Or should you do it yourself?

It’s important to keep an eye out for companies that contact you with hard sell tactics, outrageous promises and huge fees.

Avoid Credit Repair Scams

An article on MSN Money describes five such “popular approaches for making consumers part with their money with the promise of a better credit rating.” Link to the full story here.

The story also provides a great list of questions to ask before signing up with a credit repair counselor:

• Who is proposing the plan?
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• Has this entity had problems before?
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• How are they paid, how much and when?
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• What’s the downside of this plan?
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• Did you contact them or did they contact you?
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• What’s the reason for not doing this yourself?
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Clean Up Your Credit Report Yourself

Why would you give hundreds of dollars or over a thousand to someone else to clean up your credit when you can do it yourself? As the article points out,

“Thinking of paying someone else to clean up your credit file? Anything they can do, you can do better. And cheaper. But it takes time and dedication.”

If you’ve got the time and dedication, and are ready to get started, Regis Sauger’s e-book “Get Out Of Credit Prison” contains more than 40 strategies for how to legally fix your credit and take your life back.

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Photo by Andres Rueda

On the Get Rich Slowly blog, Justin Henry describes five traps to avoid when getting and using a credit card.

Justin is the President of Index Credit Cards, a terrific credit card comparison and information site.

What I love most is his rousing call to action at the end:

“Credit cards ain’t for fools. If you’re going to carry one, then take responsibility for understanding what you’re getting into, and fight fire with fire when your card company decides to play rough.”

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