How To Spot A Credit Repair Scam

| September 20, 2012
How To Spot A Credit Repair Scam

How To Spot A Credit Repair Scam

Credit repair services are on the rise in this economic climate due to the heightened level of debt that most everyone is experiencing. Most credit repair companies seem legitimate on the outside, but in actuality, there are countless scams lurking everywhere designed to put the consumer in an even more unfortunate situation. So, how is it possible to spot credit repair scams? These are some of the biggest tell tale signs that there is a credit repair scam in your midst.

Large Upfront Payments are Desired

It may not be obvious, but a credit repair company cannot accept any payments before work has begun. The only cases where a credit repair service can technically request an upfront payment are when the service is registered as non-profit or if the work is being done by a lawyer/CPA. Be cautious of requests for upfront payments, and be extremely mindful if the request is rather large. In this case, the “company” is probably looking to receive the upfront payment and run off.

The Contract Misses Very Integral Parts of the Deal

Many people have a bad habit of loosely skimming a contract before they read it. It may be because it seems like too much to read, or it may also be because they feel pressured to sign in the presence of the credit repair representative. However, it is very important that you read all sections of the contract. Make sure that the contract includes vital information such as the amount that the service will cost, itemized details about the service, the time frame that is being given for the services to be performed, and details about the actual company that’s doing the credit repair. Don’t put your signature on something that you’ll later regret.

You Were Never Given a Copy of the “Consumer Credit File Rights Under State and Federal Law” 

Before work can be begun on a person’s credit, they must be given a copy of the “Consumer Credit File Rights Under State and Federal Law.” It is a breakdown of your rights with your credit repair company. Be extremely wary if this contract is not given to you. In actuality, you probably should not continue any sort of agreement with the credit repair company if they fail to produce this contract.

A Promise is Made to “Delete” Information From Your Credit Report 

Of course, it may seem like common sense that entries on your credit report cannot be magically taken away. However, there are many people that still fall for this all the time. If your credit repair service mentions software or some other method that they can use to delete negative records from your credit report, it is probably best to stop all business and contact with them.

There is Talk of Establishing a New Identity or Even a Social Security Number

Lastly, do not, by any means, allow a credit repair service to convince you that you can simply just create a new identity with a new social security number to get around your history of credit issues. This is illegal by all means, and things are not going to be pretty when you go to use this new identity on any sort of financial application (or in any other scenario for that matter). Steer clear of companies that promise these types of things. They are all scams.

This has been a guest post by The Credit Geeks, helping thousands of customers improve their credit scores for years.

How To Spot A Credit Repair Scam

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