Be careful and watch for credit repair scams. These offers always state that they assist with bad credit, when in reality, far too often, they will overcharge you, cause you to do something illegal, or get you into a worse situation financially. Protect yourself by becoming familiar with these common frauds.
1) Companies that suggest that you lie on an application for a loan or urge you to get a second identity. Not only is this dishonest, it is fraudulent. If one of these organizations tries to get you to open accounts or apply for loans with false information, you should tell them to take a hike.
You could be charged with fraud if you allow this to happen, and it will be your responsibility for these actions, even if it was at the suggestion of the credit repair company. You need to remain focused on solving your credit problems, not adding to those problems with legal issues.
1) Credit repair companies that do simple things and charge you for them – such as putting a budget together for you. Also, you should be concerned if the company asks for money up front.
There is an abundance of great information online for anyone wanting to eliminate credit card debt and repair their credit. Be sure to gather all of this information and use it before you pay someone else.
3) Credit repair companies that hold payments from you in an escrow account, which is to be paid to your creditors. This practice is, in fact, a common scam that presents a big problem for debtors.
Here are the details for this particular scam: the debtor gives money to the credit repair company intending for it to be paid to the creditor. The repair company then puts the money in the escrow account where the balance grows. The idea is that the company will pay off your debts eventually once the balance of the account is equal to the amount of your debts. The problem is that meanwhile, the company is taking money out of this account for administrative fees even while your creditors are getting more anxious, increasing the interest on your debts, and perhaps even initiating legal action against you. This so-called credit “repair” can wind up doing just the opposite and further damaging your credit rating.
1) Credit repair organizations that try to make you feel pressured, don’t take your thoughts or concerns into consideration, or try to get you to sign a detailed contract that you haven’t read. These types of companies can’t be trusted and you should move on to someone that can be.
5) Companies offering to repair your credit instantly, without taking into consideration the current condition of your credit. This is a misleading claim that no legitimate credit repair company can deliver on. Unfortunately, there is no way around the fact that if you have bad credit, it may take years to repair completely. It is generally best to focus you attention mostly on how to eliminate credit card debt, knowing that your credit history will improve over time as a result.
In some cases, these companies claim that they are capable of removing poor credit history from your credit report by disputing it. This is simply not true. Information in your credit report cannot simply be removed if that information is true and accurate. While a credit bureau must investigate a claim of inaccurate information within 30 days, this does not suggest that the information will automatically be removed. You should refuse to do business with a credit repair company that makes this claim.
Hopefully, these tips will help you avoid credit repair scams and allow you to properly locate companies that can truly help you with your credit card debt elimination plans.