Buyer beware when it comes to credit repair services. As the FTC has pointed out, there are way too many scam companies out there offering impossible promises on credit repair. Perhaps these lines sound familiar: ?Bad credit? No problem? or ?Erase bad credit forever – 100% guaranteed!?
There really is no magic recipe for credit repair that instantly gives you perfect credit. Any company that makes promises such as the ones above are out get rich quick, regardless of who they hurt in the process. In fact, you’d be hard pressed to find a legitimate credit repair company that’s ever made such a claim. The only real way to fix your credit involves effort, patience, and dedication to a debt repayment plan.
Every day consumers with poor credit histories are targeted by these scam credit repair agencies. They take advantage of a person’s need for loans and credit cards. Most claims these companies make are completely impossible. For example, you legally cannot get accurate credit information removed from your report, whether negative or otherwise.
Yet day after day, consumers are still signing up for these services and forking over thousands of dollars in the process. Some people want very badly to believe these ‘too good to be true’ claims of easy credit repair and it can be hard to differentiate a scam from a real service. The Federal Trade Commission has issued a few tips on recognizing these scam companies.
One big sign of a scam from a credit repair company is all about the cash. If they ask you to pay up front, before any services are rendered, be careful. Under the Credit Repair Organizations Act, these companies cannot require you to pay until the services they promised are completed.
Under federal law, you have certain rights regarding your credit history, and any legitimate company will inform you of these rights. A good credit repair service will even let you know what you can do for free to help repair your credit. Be especially careful if a company goes so far as to tell you not to contact the three national credit reporting agencies yourself.
Any company that tries to get you to create a new credit identity using an employer identification number is asking you to commit credit fraud, so watch out! Another tactic of illegal credit repair is suggesting you can remove or dispute all negative credit information, regardless of accuracy. Any of these tactics are sure signs of a disreputable company.
The biggest downfall of using a bogus credit repair company is the legal trouble you may suffer. It is a federal crime to lie on a credit card or loan application and to misrepresent your social security number, among other things. If you’re trying to repair your credit, your best course of action is to hook up with a legitimate company and allow them to help you come up with a legal credit repair plan.
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