Credit Repair Scams And How To Protect Yourself
It is unfortunate that the recent credit crunch has caused a rapid rise in unethical and often illegal credit repair organizations. The credit repair industry as a whole is currently under close scrutiny by The Federal Trade Commission as they are working closely with local states to shut down companies that over promise and under deliver. These companies prey on people who are on the verge of bankruptcy and often make their situation worse.
If you find yourself in the situation that your debts, interest rates and credit rating are fast spiraling out of control you need to make intelligent decisions and steps to quickly improve your situation. If something sounds too good to be true it usually is so you need to use care as you take the steps to fix your bad credit, reduce your debt and get back on your feet.
If you're looking for some decisive steps to get started you can sign up for our Free Step by Step Credit Repair course delivered directly to you via email.
If you find yourself in a situation where you're prepared to pay someone to help fix your credit rating you want to look for an established company that does not have complaints logged against them by the Better Business Bureau, your state's Attorney General or the FTC.
Other danger signs to be wary of:
- Offers to "create a new identity" as these often include fraudulent social security scams.
- Claims to remove accurate negative information from your credit report - you can only remove inaccurate negative information (a good idea).
- Claims to be able to remove liens, debts and bankruptcies.
- Outrageous guarantees about how quickly or effectively they can turn your credit around.
- Asking for money up front before services are rendered - people have often signed contracts and send regular payments only to find the company is not using the money to reduce their debt but to pay their up-front fees. Only after they receive the several thousand dollars do they then begin to work for the client. Unfortunately, by that time the situation is usually much worse.
A legitimate credit repair firm can provide many of the following services:
- Have full disclosure about fees that they charge, including a small startup fee and pay as you go services that you can cancel at any time risk free.
- Give credible references of people they have successfully helped to provide proof that they know what they are doing.
- Have established relationships with the big three credit bureaus along with most creditors.
- Reveal that they can only remove inaccurate information on your credit report.
- Provide comprehensive counseling on budgeting and income requirements for debt servicing.
- Clearly reveal that it can often take 3-6 months and sometimes a year or more to do a complete credit repair process.
Unfortunately, there are times that due to complete loss of income and high debt there is no way for even the best of companies to repair a poor credit score. If a credit repair company finds that your situation is beyond their ability to repair it is their duty to let you know this information as soon as possible in the process and to give you advice on the best way to proceed.
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Legal credit repair is within the rights of every consumer - even if you have fairly good credit you want to review your report from time to time and remove any inaccurate information through a legally-acceptable channel. Our credit repair and debt analysis course has detailed steps on this process.
If you believe you may already have been a victim of a fraudulent credit repair company, immediately report the case to the Attorney General in your state, visit www.fraud.org to report your experience and file a claim with the Better Business Bureau.