Avoiding Credit Repair Scams
Here's
how the credit repair scam generally works...
We've all seen the ads on
television or in magazines, shouting, "Erase bad debt!" or "Remove
negative entries from your credit report!" If you're a person suffering
from a less-than-stellar credit rating, those headlines may seem like
the answer to a prayer.
The only problems is, those programs don't work, and to add insult to
injury, you'll find yourself paying hefty fees to those companies, only
to end up right where you started, or worse. Sometimes, what is couched
as a credit repair program may actually be an attempt to steal your
identity by gaining information about your social security number, bank
accounts, and credit cards.
Here's how
the credit repair scam generally works:
First, the company will contact the various credit bureaus and tell
them that the negative information contained in your files is false.
Since they want to accurately reflect your credit information, the
credit bureaus will temporarily remove the negative information while
they investigate the claims. Meanwhile, the scammer sends you a copy of
your credit file, showing that the negative information has been
removed, claiming that your credit history has now been repaired.
It will seem like a miracle, until you learn that as soon as the credit
bureaus have completed their investigation, any accurate negative
information will be returned to your credit report, and you'll be back
where you started, minus the fees that you paid to the scammer.
The key concept to remember when it comes to your credit report is that
accurate entries will stay on that report for seven years from the time
they're reported to the credit agencies. Bankruptcies stay on a report
for fourteen years.
There are many honest companies that can help you with debt problems.
But how can you know if a company is legitimate? First, scammers will
ask for their money up front, while legitimate credit repair companies
can't require payment from their clients until they've performed the
services they've promised. In many states, they must also give you a
detailed written contract, clearly explaining your legal rights and
giving you the option to cancel within three days.
The bottom line: know who you're dealing with when it comes to trying
to repair your credit. Mistakes can cost you dearly, doing even more
damage to your credit, creating even more debt problems, and sometimes
costing large amounts of money.
Copyright © Jeanette J. Fisher - All Rights Reserved.
Forget what you've been told about credit. "Credit Help!" author
Professor Jeanette Fisher was forced into becoming a credit expert
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