How To Avoid 
Credit Repair Scams

Beware of Credit Repair Scams

Once you have gotten deeply in debt, your goal becomes getting out of it as quickly as possible and regaining a good credit rating. If this happens to you, you may be tempted to seek help from a company that claims they can help you get out of debt quickly or provide you with a new credit identity.

BEWARE!!

Unfortunately, there are many, many credit repair scams out there. Many of these companies are in business only to cheat their customers who are usually under great stress and are very vulnerable. After possibly offering free help to get your good credit rating back, these credit repair "experts" will more than likely overcharge you, involve you in some illegal activity or make your financial problems worse.

Some of the most common scams are:

1. Credit repair companies will advise you to lie on loan applications or suggest you establish a different identity. This is not only dishonest, it is illegal.

If you follow illegal advice or commit fraud, you could be facing prosecution. You are responsible for your own actions. Following a company's unlawful directive is no excuse. It is a federal crime to make false statements on loan applications, to misrepresent your social security number or to obtain an employee identification number from the IRS under false pretenses.

2. A credit repair service should not ask you to pay for services before any services are rendered. Neither should they charge fees for things you can do for yourself, such as work out a budget.

3.  Watch out for credit repair companies that promise to pay your creditors from money you pay them that is placed in an escrow account. This proposition is merely a scam, and the debtor is the loser.

4.  Stay clear of any repair company that tries to put pressure on you, wont listen to you or wants you to sign a contract you have not read.

5.   Be wary of any company that offers a fast or instant credit repair -- no matter what condition the credit is in. Such a promise is pure scam. No company can legitimately repair credit that fast. In fact, in the worst case scenario, it could take years to obtain a repair.

6.  There are companies claiming to remove a poor credit history from your credit report by disputing it. This is not true. There is no way to remove accurate data from a credit report merely by disputing it. While a credit bureau is required to investigate a claim of inaccurate information within 30 days, this does not mean the information can automatically be removed.

7.  Do not work with any company that doesn't tell you your rights as a credit debtor.

Many states have laws which regulate credit repair companies. If you believe you have been cheated by a fraudulent credit repair service, report the company to your local consumer affairs office or to the office of your state attorney general. Credit repair scams are against the law.

For more information about credit cards and credit card scams, see:

Credit Card Fraud Protection - Consequences Can Be Grave
Identity Theft Protection - Prevent Identity Being Stolen
Victim of Identity Theft - Don't Let It Happen To You
Credit Repair Help - You Might Be Better Off Helping Yourself