Don’t be Fooled by Credit Repair Scams

By April Lewis-Parks

When a person is in debt they tend to get desperate because so much is on the line – they could lose their home, car, family and destroy their credit score. They lose sleep over it, don’t perform properly at their job and can become moody, which impacts their private life.

They transform from a rational thinking person into a “target” – especially when collection agencies start to call. A condition of perpetual panic grips them and they become frantic for help. In this distracted state they come to believe anything they hear or read on the internet and that’s exactly the type of people scam artists prey upon – the distressed and hopeless looking for professional assistance to get out of their financial nightmare.

These scam artists would have a person believe that credit repair is easy and can be dealt with in no time, 100% guaranteed. They tout their prowess in cleaning up credit reports so a person’s credit score improves, thus giving them the ability to get a loan. The statements they make are simply not true. Obtaining the correct help and alleviating debt is a big undertaking. There’s no way to sugar coat it.

Don’t be fooled by these scams. If a credit repair company calls or sends information through the mail or email look for these signs of fraud:

  • The company states they can purge most or all the negative credit information in a credit report, even if that information is accurate and current. They can’t, it’s illegal.
  • The company tells the person not to contact any of the three major national credit reporting companies Equifax, Experian, and TransUnion directly. If they did they would find out that they are being scammed.
  • The company advises that you try to invent a “new” credit identity — and then, a new credit report. This is done by applying for an Employer Identification Number to use instead of your Social Security number. This is illegal and could get a person into serious trouble.
  • And of course the company wants the consumer to pay for credit repair services up front, before any actions are taken. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they are committed to.

Credit repair is an arduous endeavor and that’s why scammers are successful because they make it sound simple. Between paperwork, phone calls, file keeping and maybe even a life-style change, if the person is prone to over-charging on his or her credit card, it’s a time consuming task.

There are reputable companies with employees trained to help and some can be found on the internet but these companies should offer free financial advice and tools, have certified credit counselors and provide custom plans that recognize the needs of each consumer.