The last thing someone with a poor credit score needs is to have to deal with yet another financial setback which is just one reason why credit repair scammers are such a cancer in the credit world. They promise the world to people who are desperate for a better credit score and at the least, leave them lighter in the pocketbook with nothing to show for it. And at worse, they can lower people’s credit score, get them sued by creditors, or even get them in legal trouble.
Credit repair scammers also have the effect of damaging the reputation of the entire industry causing consumers, companies, and officials to doubt even the best credit repair companies, many of which have been in business for a decade or more and combined have helped millions of people legally repair their credit scores. And perhaps this is the worst thing about credit repair scams, they keep people who could genuinely benefit from credit repair services from giving it a try. For every person who does get taken by a credit repair scam, there are probably dozens more who have avoided seeking help because of the fear of being taken.
But this does not have to be the case. There are signs you can look for to detect a credit repair scam and by knowing what to look out for, you can find a company you can trust.
Here are four warning signs of a credit repair scam:
Get a New Credit Report – This gets pitched as the ultimate way to get rid of bad credit. Instead of trying to clean up your existing credit reports, these scammers claim to be able to help you get a brand new credit report. And while they may be able to do so by tricking the credit bureaus to generate a new report using a fake Social Security number, having that new credit report will not solve your credit problems. Not only will you still have poor credit (no credit does not equal good credit), but if you attempt to use your new credit report to get a loan or other line of credit, you are breaking the law. You could end up with the same poor credit score plus a criminal record.
Large Upfront Payment – Thieves want to get your money and get away. They’ll break your car window, grab the stereo and run. They’ll come through your back door, head straight for the jewelry and get out of the house before anyone is the wiser. Credit repair scammers can be the same way. They’ll take all the money upfront, often times many hundreds or thousands of dollars, and while they may pretend for a while to be doing something to help you, they already have what they want and are merely covering their tracks. Any company that requires you to pay hundreds of dollars before they will do anything for you should be avoided.
No Credit Repair Contract – You have a right to know what a company is going to do for you, how much it will cost, and when you will be expected to pay. You also have a right to know all the fine print surrounding any guarantees and to know exactly what the cancellation procedure is. And because of this, the Credit Repair Organizations Act requires that companies provide you with a written contract that must be signed before any work can begin. Simply put, if a company does not have a contract, they should not have your business.
Only Accept Cash or Money Orders – What better way to get away with a con than to make sure you get all your profits in cash? There’s no paper trail and no method for charge backs. Once you have the money, it is up to the other person to prove not only that you acquired it fraudulently, but they also have to prove exactly how much you have taken. And for a few hundred dollars, most of the time, it simply isn’t worth the work which is a perfect situation for a scammer. These days, unless you are the neighborhood lawnmower, just about every legitimate company accepts credit. Be very skeptical of any credit repair company that does not.
Now Pay Close Attention –
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