Now that we’re a few weeks into 2012, the post-holiday bills have likely already come in on top of the usual obligations. If you’re like a lot of people out there, you’re already starting this year with the need to find a good credit repair agency. Unfortunately, scammers know this too, and this time of year you have to be extra careful if you want to avoid credit repair agency scams.
How to Spot a Credit Repair Agency Scam
Credit repair agency scams can come in many forms, and you may be contacted via telephone, email, or regular mail by a scammer who is just hoping you’ll take the bait. If you’re feeling desperate as the bills pile up, this uninvited offer for assistance may seem like just the thing you’ve been waiting for — and that’s what the scammers want you to think.
You should evaluate any unsolicited offers from a credit repair agency very carefully, and if they have any of the following warning signs, you should stay away:
Paying up front is the largest red flag and the most common – and it’s important to note that this isn’t the small set-up fee for your account that is regularly charged by a reputable credit repair agency. Scammers will instead try to get you to pay many hundreds or even thousands of dollars up front without ever performing any services whatsoever.
The ‘dispute everything’ scam dates back to a time when scammers would mass-dispute every item on your credit report and while the negative items were removed, they would present you with a “clean” version of your credit file and deem their services complete. A month or so later, all of the verified negative items would be back, and the scammers would be long gone.
Now, however, the credit bureaus will just ignore mass disputes as frivolous. Not only will you be out the money you spent, but you’ll have an even harder time getting rid of legitimately inaccurate information on your credit reports.
Everyone loves a guarantee, but no one, not even the best credit repair agency, can guarantee that they’ll be able to remove an item from your credit report without knowing the whole story. If a credit repair agency says they “guarantee” results without first discussing your situation in depth, then that is a definite sign of trouble.
The guarantee is generally paired with the “we can remove any negative item, whether accurate or inaccurate” claim. Not only is that impossible – accurate and verifiable information will always remain on your credit report – but it hints at illegal tactics being used, which brings us to the last sign of a credit repair agency scam.
Any credit repair agency that advocates building a new credit file, whether through using an EIN or some other method, is breaking the law, bottom line. You cannot legally segregate your credit files in an attempt to deceive potential creditors into issuing you credit. This is a violation of federal law and you can most certainly go to jail for it. It doesn’t matter if you were taking the advice of a credit repair agency or not – you will be the one who has to face the punishment.
Evaluating a Credit Repair Agency – Who to Trust
If you manage to avoid the above scams, there may still be some underlying issues. Does the credit repair agency have a track record of success, or do they have lots of complaints? Are you able to get ahold of someone if you have a question, or is it endless phone tag and a waiting game?
The details of customer service and results are important considerations once you’ve found a reputable credit repair agency as it can be difficult to know what kind of service you can expect.
Looking at online reviews for credit repair companies can help, but you may find more negative than positive reviews for most companies, even if they do great work. This is because people who are unhappy are more likely to post a review than people who are satisfied with the service.
A better option may be looking at their record with the Better Business Bureau, or checking court records to see if they have been sued in the past.
Perhaps the best way to evaluate a credit repair agency is to simply call them up and talk to them. You’ll be able to get a feel about how knowledgeable the company is, and you’ll also be able to see how they treat potential customers – if you feel it’s a good match, then you’re ready to make the leap.
Choosing the right credit repair agency to help you handle credit repair this year is the first step to regaining your financial freedom. Don’t let bad credit hold you back in 2012 – research companies, find the right one for you, and take a stand to regain your good credit and the financial freedom that you deserve.