Credit Repair Scams – How to Avoid Trouble

03 May 2010 @ 7:57 AM

Credit Repair Scams – How to Avoid Trouble

I’m sure you’ve heard stories of people who have hired credit repair companies for help to improve their poor credit, but have instead been ripped off by credit repair scams. In order to understand what actions must be taken to avoid being taken in by such unscrupulous people|these scammers|these crooks}, you must learn how they function.

They know that those unfortunate enough to be undergoing financial hardship are so desperate as to swallow whatever is told them, hoping these fraudulent companies really can deliver on their promises, so they can get their lives back. They will often be so disheartened by the system, which is downright cruel to those who suffer from credit problems, that they’ll take desperate measures to resolve their problems.

Most people looking for help are thinking about declaring bankruptcy. These are the people who are the easiest targets of credit repair scams.

The reason? Because they are impatient, and are unable to internalize the fact that improving their credit requires at minimum 6 – 12 months. Very often, these folks feel that they don’t have much time, and unless they take action right now, it will be too late. Ironically, when they hire these company’s rather than getting themselves rid of debt, they will find themselves worse off than ever, because they’ve been deluded into chasing a mirage.

Here are some red flags that could indicat credit repair scams:

1. They promise miracles – these unscrupulous companies promise to get every negative trade line deleted from your credit report. They will also guarantee that your score will increase in an astonishingly short time.

They attempt to do this by disputing every adverse accounts in your report. The credit bureaus may initially remove some or most of the disputed items that they can’t verify in the space of 30 days. In the meantime, it will seem that this fraudulent agency has delivered on its promise.

But if the credit bureaus is later able to verify the negative items, they will be back on your report – plus you will have earned the reputation of being a hustler!

2. They tempt you to bend the rules – they actually break the law with their tactics, such as using other people’s identity to improve credit, by offering to give you a new SSN, so that you can “start from scratch.”

Warning! Such tactics could put you in hot water. Besides the fact that it’s against the law to take up a “new” SSN, the number could have a police record attached to it, or any such things that will be far worse that having bad debt.

3. They require all their fees be paid up front – these credit repair scams are characterized by the fact that they ask for payment in full before rendering their services. This is understandable, because they will be worried that you will soon discover that they cannot really remove bad credit or improve your credit score as fast as they had promised. And at that point, you would refuse to pay.

Know that you can avoid credit repair scams. Just don’t forget that no matter how desperate your situation, don’t ignore the warning signs!

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