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Credit Repair Scams

On Behalf of | Jun 7, 2016 | Consumer Protection

As a follow up to our last blog about hiring a credit repair company, I thought it appropriate to discuss tips in spotting credit repair scams.  Consumers looking to hire a company to fix their credit need to be informed of the risks of hiring a repairer that is looking to take their money and make empty promises of fixing credit that is irreparable.

If your credit report is less than desirable and you are considering hiring a credit repair company to help fix the mess, don’t jump into hiring a company without first considering what they are offering you.  Poor credit can cause extreme stress and allowing your emotions to control your decision-making can end up doing further harm to your pocket book and no improvement to your report.

First, be aware of any company that makes a promise to remove accurate negative information.  The only information that can be deleted from your credit report is inaccurate information.  Information that is actually true, yet negative and damaging to your score may not be removed from your report and no company should make a promise to delete it.  Accurate negative information will remain on your credit file for 7 to 10 years from the date the account became delinquent depending on the type of account.  Sometimes a credit repair company can get lucky and obtain a deletion of accurate information.  However, this is pure fortune and nothing that should be promised as a guarantee.

Next, be mindful of a credit repairer that promises to fix your report in no time.  Credit scammers make promises to clean your report in a week, an amount of time that is unreasonable and cannot be done.  It takes time to order your report and to draft a thorough dispute letter.  Upon receipt of your letter, the credit reporting agencies have 30 to 45 days to investigate your request and get back to you with the results.

Additionally, beware of any credit repair company that suggests building a new credit identity.  Often times credit scammers will suggest you build a new identity by using an employee identification number in lieu of your social security number.  This conduct is fraudulent and punishable by law.

Credit repair companies that are not valid will likely ask you for payment up front.  Federal law (the Credit Repair Organization Act) requires that credit cleaners perform the work prior to receiving payment.  Also, it is illegal for a credit repairer to charge you without giving you an opportunity to cancel.  By law, as a consumer you have the opportunity to change your mind and receive all your money back.

Lastly, credit repair companies should be open and informative about your rights under the Fair Credit Reporting Act.  The Act provides you, the consumer, with the opportunity to dispute inaccurate information on your report with the three major credit reporting agencies, and you should be aware of this.  A credit cleaner should not discourage you from communicating with the agencies especially considering they cannot accomplish anything that you cannot accomplish for yourself.

If you believe your rights have been violated and you are in need of legal advice or assistance, contact SmithMarco P.C. for a completely free case review.