Avoiding Credit Repair Scams

How to Know If It Is A Credit Repair Scam

Learning about avoiding credit repair scams is essential information. Unfortunately, companies target people like you who are financially vulnerable and may have poor credit histories.

A credit repair scam artist might make a promise to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job once you pay them a fee for the service.

The truth is, many companies are not able to deliver a better credit report for you using the methods they promote.

So after you pay them hundreds or thousands of dollars in fees, you’re left with the same credit report and someone else has your money.

All that being said, there really are legitimate companies that work with credit restoration that can help you. The key to avoiding credit repair scams is to recognize them.

If you see a credit repair offer, here’s how to tell if the company behind it is trying to scam you.

You can recognize a scam when:

  • you are told what you can’t do for yourself for free
  • you are not told what your rights are.
  • you are asked to pay in full for services BEFORE they are provided. According to the Credit Repair Organizations Act, the company can’t require you to pay them until the services they promised are completed. Though as a good business practice, they may ask for a deposit to start.
  • the company isn’t listed with the better business bureau or similar agency
  • the company is not bonded
  • the question of how long the company has been is business is avoided or the answer is “for awhile”
  • it is suggested that you invent a “new” credit identity (report and score) by requesting an Employer Identification Number to use instead of your Social Security number.
  • you are promised that all the negative credit information in your credit report can be removed.
  • you are asked not to contact any of the three major credit bureaus directly.

If you lie or commit fraud, you may find yourself in an even worse mess. It’s illegal to lie on a credit or loan application, to obtain a Social Security number or an Employer Identification Number under false pretenses.

You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.

So do your self a favor and be sure that you work with a legitimate credit repair company that follows the law and doesn’t over-promise and under-deliver.

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