Falling for credit repair scams can be emotionally devastating and wind up costing you a lot of money. Your credit score determines how much you pay for things like insurance and mortgages and affects your ability to get approved for a loan. If you have found yourself in a situation where your credit score is less than desirable, there are many companies out there that can help you to rebuild your credit score. While there are many legitimate companies that can help you to rebuild your credit score, there are also many companies out there that are scams and prey on those who are vulnerable. These are the four steps to take to avoid credit repair scams.
Step 1: Look for Companies That Don’t Make Outrageous Claims
If a company is claiming to easily erase anything negative on your credit report and that they can restore your credit without a problem then proceed with caution. Negative information cannot simply be erased unless it is not valid or accurate. If it is accurate, then it has to stay on your credit report for a predetermined amount of time. A company that tells you they can simply erase anything negative from your credit report should not be trusted and you should stay away from them to avoid falling for a credit repair scam.
Step 2: Look for a Company that Educates their Clients
Legitimate credit repair companies should aim to educate their clients in the process of credit repairing and be able to inform you as to why your credit was damaged in the first place. It is possible to repair your credit on your own, the credit repair companies are just in place to help guide you through the process and make it easier to succeed. If a company tells you not to contact the major credit reporting companies directly or tells you that you will be unable to repair your credit on your own, then you should avoid them as they are most likely a scam.
Step 3: Look for Credit Repair Companies that do not make you pay up-front
Legitimate credit repair companies will wait until after their services have been performed before they accept any payment. Companies that request payment up-front before they have performed the services that you are requesting are most likely a scam.
Step 4: Look for credit repair companies that encourage you to work on improving your credit score rather than attempting to change your credit Identity
Some illegitimate credit repair companies try to convince their clients to create a new credit identity by applying for an employer Identification number to use for their credit report instead of their Social Security Number. Doing this can be considered fraud and any company that encourages the use of this is most likely a scam and should be avoided at all costs.
If you find yourself needing to repair your credit score and do not want to fall for a credit report scam then it is best to be familiar with your rights and know exactly what your credit score is and what the factors are that are lowering your credit score. It is also important to seek out the advice of a professional who is well versed and knowledgeable in FTC guidelines to help you navigate the credit repair process. There are many organizations that will offer credit repair counseling for free or little charge and there are also many organizations that will offer in-person credit counseling to those who need it.