Credit Repair Scams are on the Rise

Sunday, December 9th, 2012 By

Credit Repair History

If you need credit repair help, make sure you know who you are working with.

If you need credit repair help, make sure you know who you are working with.

Credit repair services started out with an honorable mission: to help people get out of debt and live the American Dream. They were originally designed to help people get back on track financially, while repairing the damage done due to a variety of circumstances that ruined their credit in the first place. They were not, however, designed to help you fraud the financial institutions or even the government.

During the financially prosperous times of the 1980s and ’90s, credit repair services were few in number. Why? Because there just wasn’t the market for it like there is today. Unfortunately, with the rise of unemployment and foreclosure disasters, scammers and legitimate companies popped up rather quickly, leaving you to “fend for yourself” in the jungle. Credit repair services can be helpful if you know what to look for in a company. Education is the first step to protecting yourself.

Reputable Services

Reputable credit repair companies will not tell you that you need to change your name and/or social security number in order to set up a new credit history. In fact, run from any company that tells you this—even if they have “facts and figures” supporting this theory. It is actually against the law to do this, and if you participate, you are subjecting yourself to fines or actual jail time.

Also, any reputable company will not offer to remove certain aspects of your credit report, as this is illegal. If you notice something on your credit report that seems suspicious, or you have no idea how it got there, you can dispute this item with the credit reporting agencies themselves. The FTC website has some great information on how to do this.

Popular Does Not Mean Legitimate!

If a credit repair service is popular, this doesn’t mean it is a reputable company. They may have gotten popular just because of advertising or word of mouth. However, if they offer to do illegal services just so that you will give them your money, the company will not be around for very long.

Before you do business with any company, be sure to check with the Better Business Bureau to find any negative reports that may be on record. Of course, this doesn’t always help to protect you, so dig further—your credit will thank you!

Scammers and Schemers

All credit repair scams have several things in common. The following two practices will definitely scream scam if they are proposed to you. Run away as quickly as possible if you are being sold this nonsense!

  1. Remove all derogatory credit from a person’s file. What happens here is that the company will dispute all negative credit on behalf of the customer. If the credit bureaus do not respond within 30 days, the item can be dropped from the file. However, when the credit bureau does respond, chances are, it will get placed back on the file.
  2. Apply for an Employer Identification Number, EIN. The consumer is counseled to use this number as their social security number when applying for credit. This is a felony, and can get you jail time and massive fines.

There are more, but these two items will get you in trouble if you follow through with them. Beware! If the promises that a company makes to you sounds too good to be true, then it probably is. Stick with credit counseling services that will help you help yourself in getting your finances back on track.

Save Your Money!

A good question for you is: Why would you pay someone else to do something on your behalf that you can do yourself? In other words, learn how you can repair your own credit and then put the necessary steps in place to accomplish your goals. Credit repair doesn’t have to be hard; you just need to put in the work to get there.

Get professional credit repair help

Take proactive steps to repair your credit today. For a FREE credit consultation, call 1-877-563-2076.

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This post has 2 comments

  1. Joe says:

    Very good point. And yeah–credit repair services can be a good idea, but the majority of these services are more hurtful than helpful. It really boils down to taking back control and not let anyone push you into something that is not legal. That was the point of the article. :) Thanks for the comment!

  2. Frank Fitton says:

    In these situations its imperative to remember that if it sounds too good to be true, it probably is. If these companies could indeed do what they claimed, that payment amount would seem like a pretty good deal. Based on the improved interest rate you can get with a good credit score, consumer’s could certainly save that amount right off the bat. Making the service more than worthwhile.However, what they promise just isn't possible.

    What people need to realize and take from this is that there are no quick fixes for your credit score if the information is accurate. That’s not to say that the entire credit repair industry is a scam. Credit repair done the right way gets rid of information on there that might be wrongly attributed to you or simply reported inaccurately. There certainly is a whole lot of that going on. People of course can attempt to clean up wrong information themselves, but as with any service its a whole lot easier if you hire a professional. Making sure all the information on your credit report is really you AND reported accurately is the service that legitimate credit repair organizations offer. Anyone offering you anything more than that, and wanting payment upfront to do it, is simply looking to take your money.

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