You’ve probably seen ads for credit repair services and may have received their fliers in the mail. As you look for legitimate credit counseling help, you may come across their listings in the phone book. Credit repair services push an almost magical solution: “We’ll wipe away your bad credit history and let you start over with a clean slate. We’ll give you a new identity and let you step away from your old one. We’ll remove bankruptcies, judgments, and bad loans from your credit file forever!”

Stay away from them. They’ll take money—hundreds or even thousands of dollars—that you desperately need to work your way out of debt. And they can’t deliver. By the time you realize you’ve been taken, your money will be gone. And, in many cases, so will the credit repair service.

Many of these services engage in illegal practices and come and go under different names until they are finally caught and shut down. Here’s what they usually do:

* Require you to pay up front, before any services are provided

* Hide important facts from you, such as your legal rights and what you can do yourself—for free—to correct mistakes in your credit record

* Suggest that you try to create a new identity for yourself by applying for an Employee Identification Number to use instead of your Social Security number on credit applications

* Get you to dispute all negative information in your credit report, even information you know is true

You can be charged and prosecuted along with the service for the part you play in any illegal actions they’ve suggested.

It’s a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security number, or to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.