Are you trying to improve your credit score? Who isn’t these days? Whether it’s to apply for new lines of credit or refinance at a lower rate, having the highest credit score possible is more important than ever. Turning to a third party credit repair firm can have its benefits, but many of these outfits are scams that can’t make good on their claims. To protect your consumer rights, watch out for some of these tell- tale signs:
- “We require payment in full, up-front” – The Credit Repair Organizations Act explicitly says that cannot require payment until they have completed the services they have promised. These for-profit companies are also required to issue a detailed written contract and give three days for cancellation. Any company who is requiring any payment before working with you is more than likely not legitimate.
- “You can’t correct your credit report on your own” – If you have been denied credit because of negative information on your credit report, you have the right to a free copy. At any other time, you may pay a small fee to obtain one. Anything a credit repair operation can do, you could also do for yourself. If an organization does not tell you your legal rights and what you can do for free, avoid that company.
- “You can credit a new credit identity, legally! – Some companies may suggest you apply for an IRS Employer Identification Number with a new blank credit history to use in place of your Social Security Number. This is a felony! And a word to the wise – if you’re in your mid 30’s and your credit history appears blank to a prospective lender, do you think they will believe that is accurate? You cannot simply create a new credit identity.
- “Don’t contact any of the credit bureaus” – Any credit repair group advising you not to contact one of the major credit bureaus – Equifax, TransUnion and Experian – is likely not running a legal operation. You have the right to contact any and all of these agencies to dispute an issue with your report.
- “We can erase bad credit and remove bankruptcies, judgments, and liens” – This is an outright lie. No one can erase negative credit information that is current and accurately reported. Only time can fix negative incidents on your credit reports – 7 years from the time it’s reported and 10 years for bankruptcy. Even if a late bill has now been paid in full, that note will remain on your record. Don’t believe an agency can remove accurate information from your credit report!
Any credit repair companies making these claims should not be trusted. Better yet, save yourself the
hassle and don’t hire a credit repair service at all – hire a non-profit credit counseling service or get
familiar with the Fair Credit Reporting Act and repair your credit personally. Check your personal credit
report once a year and stick to a solid plan of debt repayment. Don’t fall into the scam of a quick credit