Credit Repair Scams: Do Not Be Fooled
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There are a large number of unethical companies falsely promising you they will repair your credit. If you are not up to addressing the errors on your credit report personally, or if you need more information on improving your credit, you may consider using a credit repair company or a credit consultant.
How are you able to determine who is real? That’s why the Credit Repair Organizations Act was passed, as it can help you do just that. If you know what to look for, you will be able to successfully avoid scammers.
1. Make sure you look at different companies to get an idea of the way they all do business. In general as well as for this industry, it is better to avoid marketers contacting you directly by mail or phone. Until you see other companies, do not sign anything, even if you are meeting them and are under pressure.
2. Bypass a company that attempts to collect money in advance. Until they have done something for you, you should not pay them.
3. A company may promise you a credit score increase of 100 points, but do not select a company that can guarantee the results they will get for you. They have no control over the certain score you get and cannot advertise anything besides the average results that they have gotten in the past for other clients. They cannot be sure that they can improve your credit score at all until they know your circumstances and see your report.
4. Repairing your credit is by yourself is your right which they should inform you. Hiring someone isn’t needed unless it’s what you want to do. They may not be legitimate if their materials do not tell you this fact.
5. If you are unable to cancel a contract, do not enter it. Cancellation at any time should be permitted. You would have to pay for the work they had already done up to that point, but not after that.
6. Keep far away from any company that offers file segregation. It involves creating a new credit identity for you and is illegal.
If the credit repair company tries to talk you into file segregation, please remember that if they get caught, you get caught also. Your participation as a client is unlawful too. If one unhappy client reports them, all of their files will be examined, and it could result in trouble for their other clients… This would mean trouble for you, too.
Many companies will send letters to people who file for bankruptcy promising them to solve all their credit problems in this way. Although they will say that it is legal, after your new credit file is set up you will have to lie on the application forms any time that you apply for credit. It is fraud to give false information to obtain credit. There is a possibility that you will have to pay a fine or serve time in jail.
With some research you can find legitimate companies willing to help you improve your credit score. The common credit repair scams are easy to avoid if you only know these principles.
