One of the critical components of your financial life is our credit score. This impacts whether or not you can borrow, get a credit card, even get a job. Having great credit in itself shows responsibility, but a credit repair scam can devastate your take care of money. Be aware of risks and know where to look for red flag so that you do not credit your credit.
What is a Credit Repair Scam
A Credit Repair Scam is the illegal use of guaranteed credit report improvement through fraudulent action or fraud. They are businesses that prey on individuals who have a low credit history promising immediate solutions leading more often than not to further financial debt.
Grotesque Ways The Credit Repair Scams Try to Trick You
You must know the dirty tricks used by scam companies, in order to avoid getting suckered. These are some red flags..
1. False Hope of Eliminating Negative Items By a Non-Debtor
Some Scam companies will say that they can eliminate EVERYTHING negative from your credit repair report. This is exempt by law false information can be cleared. Accurate negative entries ( like being 30 days late or declaring bankruptcy) typically stay on your report from 7 – 10 years.
2. Preliminary charges Other than services
Consumer protections under federal law do not allow credit repair companies to charge any fees until completion of the promised services. Companies demanding upfront money, is a big red flag.
3. Generate a Better FICO
If a company promises to grant you a fresh credit identity with the help of another social security number (ssn) or tax id This is wrong and you can be fined heavy.
4. Ask for empty forms and personal
A wise credit repair company will never ask you to sign blank forms or give personal information with out an obvious justification. This will cause identity theft.
5. Recommended to Report Accurate Details
When a company tells you to dispute all information on your credit report, even if that is accurate this is an unethical practice and can lead to the negative impact on the credit bureau.
6. Do not listen if anyone refuse to say what services are
A good company will explain their processes very clearly. If a company is not willing to disclose any information or you have to pay to find out what it is, just move on.
How to Protect Yourself from Credit Repair Scams
Stay away from credit repair scams by doing this:
- Research the Company: Check for reviews and make sure they are in good standing with the Better Business Bureau (BBB).
- Look for Certifications: Typically, legitimate companies will be a part of some sort of valid credit association.
- Know Your Rights: Read the legislative laws such as the federal Credit Repair Organizations Act (CROA) provide consumer protection against abusive practices.
Credit Repair Solutions That Are Safe
Do not take the chance of getting scammed with credit repair, try these safer alternatives:
- Credit Counseling Services: Get YOU through debt savvy, practice becoming financially responsible with a certified credit counselor.
- My Credit Repair (Do it Yourself) Read your Credit Report for Mistakes and then Dispute THEM BY YOURSELF. It will take time, but at least you have the upper hand.
- Credit Repair Companies: Call your government office if you need the truth and if you definitely going to hired a company make sure it follow federal law.
Conclusion
Tragically, falling for a credit repair scam has long-term effects on your life. But if you know what to look for and when your rights in payback you can avoid fraud, and work towards better credit score. Trust but verify always be wary, do your homework and never send personal information to a company that you are not all too happy about. . personal information to a company you don’t fully trust.