Credit Repair Scams are on the Rise
Credit Repair History
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 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!
- 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.
- Request an Employer Identification Number, EIN. The consumer is counseled to use this number as their social security number when requesting 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.