Credit report repair is big business these days and credit repair scams
are all around us. If you don’t have the time or patience to dispute
the inaccuracies on your credit report yourself, and if you want to
know other methods of improving your credit score, an independent
credit repair company or consultant could be just what you need. But
how can you tell who is genuine? The Credit Repair Organizations Act
was passed to help you do just that. Avoid the scammers by knowing what
to look out for. 1. Shop around for a company so that you get a
feeling for the standards that they all have. As with all services, it
is usually better not to respond to people who contact you cold,
directly by telephone or letter. Even if you agree to meet them, do not
be pressurized into signing anything until you have had a chance to
shop around. 2. Avoid any company that tries to collect money from you
up front. They should not require payment until they have performed
some services for you. 3. Do not select a company that makes
guarantees about the results that they will get for you – for example,
if they promise you a credit score increase of 100 points. They can
advertise the average results that they have gotten for other clients,
but they cannot promise you a certain score because they do not control
that. Until they see your report and know your circumstances, they
cannot be sure that they can improve your credit score at all. 4. They
must inform you that you have a right to repair your credit for
yourself. You do not need to hire anybody unless you want to. If their
written information does not tell you this, they may not be legitimate.
5. Do not enter a contract that you cannot cancel. You should be
allowed to cancel at any time. You would have to pay for the work that
they had done for you up to that point, but no more. 6. Avoid any
company that offers file segregation. This is an illegal practice that
involves creating a new credit identity for you. If you are tempted to
go for file segregation remember that if the credit repair company is
caught, so are you. You would be breaking the law too. All it takes is
for one unhappy client to report them and all of their files will be
examined, resulting in trouble for their other clients … including you.
People who file for bankruptcy almost always receive letters from
companies promising to solve all of their credit problems in this way.
They will say that it is legal but after your new credit file is set up,
any time that you apply for credit you will have to lie on the
application forms. Giving false information to obtain credit is fraud.
You can be fined or even sent to jail. There are plenty of legitimate
companies out there that can help you with improving your credit score.
Keep these points in mind and you will have no trouble avoiding the
most common credit repair scams.