Avoid Credit Repair Scams

You’re trying to improve your credit and credit scores, but you don’t know where to begin. You start researching “credit repair” for possible help and now your social media newsfeed is blowing up with all kinds of credit repair advertisements.

What is a Credit Repair Scam?

A legitimate credit repair company will not promise or guarantee results. A credit repair scam usually starts with a company promising or guaranteeing to “fix” your credit score.  These companies will often ask for an up front fee before ANY work is completed. Once you pay the fee, you may never hear from them again. If you give them your Social Security number, they may sell it to other companies illegally.

Some credit repair scams will offer a “new credit identity,” claiming they can help you start fresh with a new SSN or what is known as a Credit Privacy Number (CPN), which is illegal. Remember, if you use an SSN other than your own when you apply for a loan or line of credit, you could end up facing steep fines or even criminal charges.

What are the Signs?

Here are some signs that a credit repair company is not legit:

1. Lack of online presence. Do an online search of the company. Does the company have a website? How long has the company been in business? Are they accredited with the Better Business Bureau and are they up to industry standards. If you’re still skeptical, you can check with your state’s attorney generals office to see if they have any complaints filed against them.

2. Requiring up front payments. The company you’re dealing with is most likely a scam if they ask for money up front before any service is performed and they provide no details on the actions they’ll take. By law, a credit repair company is required to explain your legal rights, give you a 3-day right to cancel, outline the total cost you’ll pay and provide a detailed list of what steps they’ll take to help. If you pay an origination or account setup fee, it should be factored into the total you will pay. Your Legal Rights

3. Advise you to lie. If the company you’re dealing with advises you to lie on a credit card or loan application, use a fake SSN or dispute accurate information on your credit report, it’s a scam. All of these actions are illegal, and a legitimate company won’t advise you to falsify any information.