People with poor credit usually do best to avoid credit repair clinics, which sometimes claim they can give you a new credit record. You cannot wipe your credit file; otherwise consumers could abuse credit and have few repercussions. Instead of trying to get a new record, you should up clean your current file -- and probably get credit sooner than you think.
Why It Is Not Possible
The credit rating agencies track your financial habits via your Social Security number (SSN). Theoretically, you could obtain a new credit record using a Tax ID or Employer ID number (with different digits) in lieu of the SSN, but it's not legal. Some companies even suggest using the SSN of a dead person or minor. In reality, though, nobody can legally sell you information on creating a new credit identity, nor can you do so yourself, because the federal government considers it fraud.
Penalties
Banks can quickly figure out that your SSN is really a fake, and once the creditor finds out, the case will likely be referred to a district attorney. If a credit-repair company helps you commit credit fraud -- even if you do nothing other than give them money -- you are still liable for civil and criminal penalties. Typical first-time offenders receive two years in prison.
Your Record Clears Itself
Information, no matter how bad, leaves your credit report if you wait long enough. Most negative items on a credit report follow the seven-year reporting rule., disappearing after that. A few items stay longer. Bankruptcy can stay on your record for 10 years and tax liens for 15. Generally, incidents on your credit record become less important as time goes on.
Cleaning Up Your Report
While you wait for bad items to drop off your report, start adding positive information to your credit profile. Pull your report for free from each agency from AnnualCreditReport. Review accounts that have negative marks against them. If you have frequent late payments, make a commitment to paying those bills on time. Pay down credit card debt when you use too much of your credit limit. Lenders might work with you to lower interest rates or defer payments during periods of temporary hardship, such as losing a job.
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