How to Spot and Avoid Credit Repair Scams

August 28, 2013

For unsuspecting borrowers who may be on the brink of serious debt or have shaky finances, dealing with agencies that operate such credit repair scam can be ruinous.

For unsuspecting borrowers who may be on the brink of serious debt or have shaky finances, dealing with agencies that operate such credit repair scam can be ruinous.

Although there are a number of reputable credit repair and credit counseling agencies that may be able to help you reduce your debt and improve your overall credit standing, unfortunately, there are also a number of unscrupulous agencies that can actually hurt your credit rating despite claiming that they will help you. For unsuspecting borrowers who may already be on the brink of serious debt or have shaky finances, dealing with agencies that operate such credit repair scam can be ruinous. As a result, it’s important that:

  • Borrowers are aware of the signs of credit repair scams.
  • Borrowers avoid working with agencies that operate such scams and do not sign anything with an agency until they are sure that the agency operates ethically.

Some specific signs that a business or agency is operating a credit repair scam can include that the following:

  • Demanding that clients pay upfront prior to any credit repair services being initiated.
  • Failing to discuss clients’ legal rights and/or to inform them about steps they can take on their own to improve their credit.
  • Requesting that clients refrain from directly contacting any credit reporting agency.
  • Recommending that clients try to establish a fresh credit history by using an Employer ID number or by attempting to create a new identity, rather than using their social security number. This could lead to allegations of fraud.

If you are looking for credit repair help and notice any of these red flags with a specific company or agency, do NOT start doing business with them, as they could cost you hundreds – if not thousands – of dollars and could seriously damage your credit.

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Categories: Blog, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Credit, Credit History, Credit Repair Scams