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How To Detect Credit Repair Scams
Many so-called credit repair companies are really just lenders where you are expected to address your debt problems by taking on further debt. Ideally you should be looking for non-profit credit counceling services instead, some of these are registered charities and can work on your behalf.. If you do use a credit repair company make sure they have good standing with the Better Business Bureau. This article shows you how to identify credit repair scams.
Avoid any company that tells you to lie on loan applications or use a different identity, this can mean legal problems on top of your financial ones. Always be aware of what you can do for free yourself such as work out a budget or get copies of your credit report and have errors on them fixed. Avoid any company that charges you for something you could do on your own.
Some companies will promise to pay your creditors from money you pay to them which they then keep in an escrow account. The idea here is that the money in escrow account grows and will eventually be large enough to pay off your debts. In reality the company removes money from the account for admin fees while creditors become more and more anxious, this can ruin your credit rating.
Avoid any company that pressures you, does not tell you your rights, won’t listen to you or wants you to sign a contract you’ve not read. If a company does not advise you of your credit rights, then its an indication that they are not really on your side in the first place.
Credit repair is never an instant or even fast process so avoid any company that claims it can instantly transform your credit rating. A bad credit rating can sometimes take years to reverse.
It’s a lie that adverse entries on a credit report can be removed by disputing them even though they are accurate. The credit bureau is legally required to remove disputed items it has not investgated within 30 days and some companies hope that by disputing everything they will create a backlog that will lead to the erasure of the adverse items. Credit bureaus are well aware of this scam so it does not work. Avoid any company that proposes it.
By John Kirkham
Avoid any company that tells you to lie on loan applications or use a different identity, this can mean legal problems on top of your financial ones. Always be aware of what you can do for free yourself such as work out a budget or get copies of your credit report and have errors on them fixed. Avoid any company that charges you for something you could do on your own.
Some companies will promise to pay your creditors from money you pay to them which they then keep in an escrow account. The idea here is that the money in escrow account grows and will eventually be large enough to pay off your debts. In reality the company removes money from the account for admin fees while creditors become more and more anxious, this can ruin your credit rating.
Avoid any company that pressures you, does not tell you your rights, won’t listen to you or wants you to sign a contract you’ve not read. If a company does not advise you of your credit rights, then its an indication that they are not really on your side in the first place.
Credit repair is never an instant or even fast process so avoid any company that claims it can instantly transform your credit rating. A bad credit rating can sometimes take years to reverse.
It’s a lie that adverse entries on a credit report can be removed by disputing them even though they are accurate. The credit bureau is legally required to remove disputed items it has not investgated within 30 days and some companies hope that by disputing everything they will create a backlog that will lead to the erasure of the adverse items. Credit bureaus are well aware of this scam so it does not work. Avoid any company that proposes it.
By John Kirkham
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