You are desperate to repair your credit and so decide to go to an agency. There are ethical credit repair companies and some are only wanting your cash.
So how can you tell a good credit repair company from one that is a scam? Let’s run you through the warning signs those companies to avoid.
They promise results
A less than honest credit repair company will swear that they can get results on removing disputed items from your credit record. This is simply not possible. They can definitely dispute any inaccuracies, but the power to remove these belongs with the credit bureaus.
Promises can be:
● Eliminating all the negative information from your credit record
● Saying they can increase your credit rating
● Guaranteeing results
They ask you to provide false information
The typical examples are:
● Asking for you to give fake Employee Identification Numbers (EIn)
● Requesting false Credit Privacy Numbers (CPN)
● Wanting bogus Social Security Numbers (SSN)
● Asking you to come up with fake personal information
These are all ways in which unethical credit repair agencies have you create a false identity. Then they can exploit this information for their own benefit.
As you know, providing false information is illegal.
You aren’t told your legal rights
The Fair Credit Reporting Act states that you have a free legal right to dispute errors on your credit report. Any credit repair agency that is ethical will tell you this. Companies that are scams won’t let you know.
Also, dishonest credit repair companies:
● Won’t let you contact the credit bureaus
● Will ask you to sign contracts with payment details missing
● Contracts may have the starting date of the service left out
● Don’t let you see your credit record
When you feel like a credit agency is being deceitful, you have the right to leave and find another company. Also, you have three days in which you can cancel a contract.
You have to pay at the start
Credit repair companies are regulated by the Credit Repair Organizations Act (CROA). This act specifically forbids credit repair agencies from asking for advanced payment of services.
The CROA stipulates that credit repair agencies can only request payment after they have delivered their services.
Additionally, you may be told that there is a contract cancellation fee. As we mentioned, you have three days in which to cancel a contract. You shouldn’t be asked to pay a penalty.
What happens if you are scammed?
If you have been scammed by a credit repair agency, there are actions you can take. Contact your attorney general and let them know. Also, you can lay a complaint with the Federal Trade Commission.
Another option is to seek legal advice.
Some credit repair agencies are less than honest. They play on the ignorance and desperation of individuals who want to improve their credit. By knowing the signs of companies that are a scam, you save yourself from additional grief and stress.
Don’t feel forced into doing anything you aren’t comfortable with. If you have the slightest suspicion about the company you are dealing with, then leave it and go somewhere else.