How to Recognize a Credit Repair Scam

With promise to clean up a credit report, credit companies target consumers every day that have poor credit histories so that they can get a home mortgage, a car loan, an insurance, or even a job once they pay them a service fee. In reality, these companies can’t bring out an improved credit report for using the tactics they endorse; it’s illegal. It is impossible for someone to remove exact negative information from your credit report. The result is, you are left with the same credit report plus someone else has your money after you pay the credit companies hundreds or even thousands of dollars in fees. If you are given a credit offer, here’s how to tell if the company behind it is up to something fishy:

1. The company wants you to pay for credit repair services even before they provide their own services. Under the Credit Repair Organization Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
2. The company doesn’t inform you of your rights and what you can do for yourself for free.
3. The company suggests that you do not contact any of the three major national credit companies directly.
4. The company tells you that they can erase most if not all of the negative credit information in your credit report, even if that information is current and accurate.
5. The company recommends that you try to conceive a “new” credit identity, then, a new credit report by applying for an Employer Identification number to use instead of your Social Security number.
6. The company instructs you to argue all the information in your credit report, regardless of its accuracy and timeliness.

You might find yourself in big trouble if you follow illegal advice and commit fraud. It’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or even the internet to apply for credit and provide false date. It’s better to be clean and have peace of mind, rather than putting yourself in a lot of mess.