Avoiding Credit Repair Scams


You're up to your eyeballs in debt. You're getting a lot of calls from collection agencies. You're starting to feel desperate, and thinking about filing for bankruptcy. Then you see an ad or get a flyer in the mail from a Credit Repair company. They say for a fee they can erase your bad credit and give you a new credit identity. Does it sound too good to be true? It is. Every day scammers try to fool consumers with poor credit histories. But after you pay their fee they do nothing to improve your credit report. Choosing Credit Repair help from one of these companies will only worsen your financial situation. This costs money you don't have, wastes your time, and puts you further behind. You can't remove accurate, current information from a credit report, even if it's bad. Only the passage of time - seven years for most information, 10 years for bankruptcy information - can do that.

Warning Signs of a Scam

If you decide to look into a credit repair offer, beware of the following warning signs offered by the Federal Trade Commission (FTC):

The company wants you to pay for credit repair services before they do anything. They don't tell you your legal rights and what you can do by yourself for free. They recommend you not contact a credit bureau. They suggest you invent a new credit identity by applying for an Employer Identification Number to use instead of your social security number. They tell you to dispute all information in your credit report or do something else that seems illegal. If you follow the advice of one of these companies you may be committing fraud. You could be sued, or worse, charged with a crime. If you use the mail, telephone, or internet to apply for credit and provide false information you're committing mail or wire fraud. It's also a federal crime to lie on a loan or credit application misrepresent your social security number or Get an Employer Identification Number from the Internal Revenue Service under false pretenses.