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.

Student Loan for a Better Future

If you decided to pursue a tertiary education, whether in a university, community college, or vocational school, it is most likely that you would have to avail for a student loan. There are several kinds of student loans available to make your student life easier. The federal government offers one of the best types, while some private companies offer many attractive forms of student loans, as well. It is important that you understand the different types for you to manage your educational financing.

The federal Stafford loan is the most common type of student loan taken from the federal government for education. Compared to other student load types, this loan has a more flexible repayment terms and has great interest rates. You don’t need to worry whether you can meet their requirements for a loan, because they are very accommodating. Not only that, credit check is not required; you only need to be in school half-time and the major determining factor in eligibility is the need for you to have a student loan.

Private loans come next to government loans used for education. Obviously, private companies are profit oriented, so their terms are typically based on your personal credit rating; depending on your score, their terms can be significantly higher than what the government offers. It is advisable to use only student loans offered by private companies to fill out what the federal programs cannot. Plus it pays to rely more on the federal government for such loans since the rates tend to be much higher.

There are two principal types of private loans; the first type is for full time students seeking a four-year degree, and the second type is targeted toward those continuing their education but not seeking a degree. Also private loans can be of the signature type. This is when one simply signs an agreement to pay back the loan. This might require a consigner who vouches for your credit worthiness, just in case.

The payment of the first type of student loan will be in forbearance until a certain time after the student leaves school. The given “grace period” of the private loans is usually shorter than it is with government loans. On the other hand, the second type of student loan depends on the amount of time one spends school. The student has the option of availing a “grace period” during the academic year or he may opt to schedule to start as soon as the disbursement of the funds.

If you want a college education minus the required payment, you may consider other types of funding available, such as grants and scholarships. Whatever type of student loan you want to avail, use it to your greatest advantage for you to have greater after school opportunities. But remember, a student loan is still a loan; you still have to pay for it. With the above being said, you can therefore prefer grants over federal loans and federal loans over private loans.