Recognizing a Credit Repair Scam
January 16th, 2009. Published under Finance. No Comments.
Everyday, companies target consumers who have poor credit histories with promises to clean up their credit report so they can get a car loan, a home mortgage, insurance, or even a job once they pay them a fee for the service. The truth is, these companies cant deliver an improved credit report for you using the tactics they promote. Its illegal: No one can remove accurate negative information from your credit report. So after you pay them hundreds or thousands of dollars in fees, youre left with the same credit report and someone else has your money.
If you see a credit repair offer, heres how to tell if the company behind it is up to no good:
* Before they provide any credit repair services, the company wants you to pay upfront. Credit repair companies cannot require you to pay until they have completed the services they have promised under the Credit Repair Organizations Act.
* Your rights and what you can do for yourself for free isn’t disclosed to you.
* Contacting any of the three major national credit reporting companies directly is not recommended by the company.
* Despite how accurate and current your credit information is, the company tell you they can get rid of most or all the negative credit information.
* The company suggests that you try to invent a new credit identity ” and then, a new credit report ” by applying for an Employer Identification Number to use instead of your Social Security number.
* The company advises you to dispute all the information in your credit report, regardless of how accurate and current it is.
You may find yourself in legal hot water if you follow illegal advice and commit fraud: Know that it’s a federal crime to lie on a loan or credit application, to misrepresent your Social Security number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses. You could be charged and prosecuted for mail or wire fraud if you use the mail, telephone, or Internet to apply for credit and provide false information.