27 Nov
Bogus companies target vulnerable consumers who have poor credit histories and need bad credit repair. They promise to improve credit scores so you can qualify for loan or credit after they charge you a large fee and then leave you high and dry. While there are legitimate companies who provide credit repair services, there are a number of scams out there. The important piece to remember is that no one can remove accurate negative information from your credit report. Furthermore, improving credit often requires diligence and patience- it’s usually not a quick fix. If you fall prey to a scam, you’ll be out hundreds or thousands of dollars in fees and your credit report will remain unchanged. According to the Federal Trade Commission on their website www.ftc.gov, the following are red flags:
- The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
- The company doesn’t tell you your rights and what you can do for yourself for free.
- The company recommends that you do not contact any of the three major national credit reporting companies directly.
- The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
- The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
- The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
