Jan 10, 2010

Credt Repair – Three Tips to Spot Scammers

Credit repair scams are on the rise – and while the FTC continues to go after fraudulent credit repair companies, being an informed consumer is your best defense against being taken in by a scammer. With credit repair scams becoming more sophisticated, it pays to revisit the three most common red flags when it comes to credit repair scams.

Tip 1: Ask questions to any prospective credit repair company before you sign up for service.

Make certain that you know what you are paying for, and how your credit report will be handled. Be certain that any credit repair company you choose has a privacy policy and security in place to protect your sensitive information. Stay away from any company that refuses to tell you any details about their credit repair services, or that claim they can remove accurate information due to “special relationships” with creditors and credit bureaus. These types of offers are always a scam – there is no credit repair company that can remove accurate information due to special ties with any of the credit bureaus, and creditors do not maintain special relationships with credit repair companies.

Tip 2: Don’t pay large fees up front.

Credit repair companies that charge thousands of dollars up front are almost always a scam. People who pay generally see little if any action on their case, and often these companies disappear as soon as the complaints start to roll in. Charging high fees up front is illegal when it comes to credit repair companies, so if the price seems unusually high, stay away. Additionally, stay away from any credit repair company that does not uphold the legally required grace period when signing up for credit repair services. If you change your mind within the first few days of your contract for their service, you have the right to cancel and not be billed.

Tip 3: Do your research.

Is the company registered to do business in your state? Are they a member of the Better Business Bureau? Do they have any clients that you can contact as a reference? While the answers to these questions may not identify all potential scammers, any company that has problems following state and federal laws should be avoided at all costs. If they don’t follow the laws in regards to providing their service, chances are good that they won’t be working in your best interests. When considering any credit repair company, always check both online and offline sources for any information that may point to a scam – don’t stop at online complaint boards, as an absence of complaints is not a guarantee that the company is trustworthy.

If you follow these three tips when you are looking for a reputable credit repair company, you’ll save yourself time, money, and financial security in the long run. By weeding out the scammers from legitimate credit repair businesses, you can rest assured that your investment in your financial future is a sound one.

Posted in credit repair companies, credit repair scams, credit repair services | No Comments »



Dec 14, 2009

Credit Repair and Identity Theft – How to Protect Yourself

When most people think of credit repair scams, what comes to mind are the fraudulent companies that take people’s money and provide little or no service in exchange. While it’s true that there are numerous credit repair scammers out there who thrive on this practice, consumers should also be aware of the threat of identity theft when it comes to fraudulent credit repair companies.  These companies not only take your money, but they take over your identity as well – months or even years down the line, when you’ve finally gotten your credit back on track, they can resurface to wreck havoc on your finances and destroy what you’ve worked to carefully rebuild.

Protecting Your Identity

Because credit repair companies must handle sensitive information in order to help you improve your credit scores, it pays to find out exactly how they secure your information, and what type of policies they have in place to protect your identity. Stay away from credit repair companies that don’t have a clearly visible privacy policy, and/or don’t have any method of contact other than email. Ideally, you want to be able to contact the company via telephone and an actual physical address – not just a P.O. Box. By establishing a physical presence that is easily located, a reputable credit repair company is one that will be around for the long-term.

Online Precautions

You should be able to get answers about the methods used to secure your data, about encryption on the company’s website (if they have one) and who has access to your data, and when. You should also be able to revoke access to this data at any time, if you choose to end your business relationship with the company. Check the security certificates of the website – they should be current, and they should match the name of the website and the credit repair company. Be wary of any company that has an invalid or expired security certificate – without a valid certificate, your information is not safe.

Company Policies

Different credit repair companies will have different policies when it comes to how your information is handled. You should find out who will have access to that information before you sign up for service. While the credit repair company may take appropriate security steps, third-party vendors with access to your information may not, and this can cause troubles with identity theft down the line, if unauthorized people are able to view your information.

The Final Choice

When deciding on which credit repair company to use, always factor in the security of your personal information. Credit repair can benefit you in many ways, including improved credit scores, lower interest rates and better rates on insurance to name a few. Always make sure that your final choice for credit repair is one that protects these benefits by protecting your identity as well.

Posted in credit repair companies, credit repair company, credit repair scams, identity theft, interest rates | No Comments »



Sep 26, 2009

Troubled Economy Leads to Increased Credit Repair Fraud

The current market places some unique burdens on the responsible consumer today. Many people who had no prior difficulties in obtaining loans or financing are finding that their credit scores are no longer sufficient to get the type of financing they are used to receiving from lenders. As the troubled economic situation lingers, you may discover that what was once a perfectly acceptable credit score will no longer qualify you for an affordable loan, or you may find that your credit card interest rate has increased, despite your repayment history on that account. Because of these new difficulties in obtaining credit, more and more individuals are turning to credit repair companies for assistance. And just as quickly, scammers and fraudsters are trying to take advantage. The FTC has recently sued several credit repair companies for violating criminal law, and scamming their customers out of thousands of dollars.

While the warning signs of a scam haven’t changed, individuals who may be not be used to the concept of credit repair services may be more vulnerable as fraudulent credit repair companies target the middle class workers who are the hardest hit in the current financial meltdown. These scam artists charge hundreds, even thousands of dollars in advance, while taking little or no action to help consumers who have contacted them for assistance. How can you make sure that you aren’t taken in by credit repair fraud? Dealing with only reputable credit repair agencies is essential, but if you are looking around for a good credit repair company, there are a few things to avoid:

Large upfront fees – these are a clear warning sign. Be especially wary of any company that wants the money up front, before discussing your particular situation.

Company makes broad guarantees – any company that promises a specific credit score is lying to you. There is no way for a company to be certain that you will go from a 620 to a 700, and no way for them to guarantee that the credit bureaus will increase your scores by a certain amount. Again, be especially wary if they make these types of claims regardless of your actual credit score and/or your current financial situation.

Company suggests fraudulent means of credit repair – some companies try to get their clients to create a new, blank credit card file, using an Employer Identification Number (EIN) or other means. These types of credit repair are fraud, and if you follow their advice, not only will you lose money to scam, but you may also be arrested for breaking the law.

Your credit score directly impacts several facets of your life. Don’t trust credit repair to just anyone – do your homework, ask questions, and avoid high-pressure sales tactics. When you do choose a credit repair company, check them out with the Better Business Bureau, and make certain you are getting exactly what you’re paying for.

Posted in credit repair, credit repair fraud, credit repair scams, credit scores | No Comments »



Jul 1, 2009

Recognizing Credit Repair Scams

As the economic slump continues, more and more people are looking to credit repair in order to improve their credit scores. Creditors are requiring higher scores in order to qualify for loans that in the past could be obtained with mediocre or even marginal credit. Individuals who have lost their jobs and missed payments on credit accounts depend on credit repair in some cases to improve their scores to levels that will allow them to qualify for these increasingly strict credit requirements that lenders have imposed. Scam artists recognize the increased market, so any consumer looking for credit repair help should be prepared to go the extra mile before signing on with any credit repair company. In particular, be wary of any company that falls into one or more of the following categories – chances are good that you may be looking at a scam:

  • Guaranteed Score – any credit repair company that guarantees you a particular credit score is almost always a scam. There is no way to know for certain how high your credit score will be, even if the credit repair is successful. Creditors advertising a 700 or better in 30 days are just out to take advantage of desperate consumers.
  • Minimal Contact Information – be wary of a credit repair company that operates solely from a website. If there is no phone number, and no physical address, it is very difficult to be certain of a company’s legitimacy.
  • Just Opened – don’t trust your credit repair needs to a company that just opened. Scam artists often start fake companies only to fold months later, after taking hundreds of thousands of dollars from unwary consumers.
  • High Pressure Sales – reputable credit repair agencies don’t need to resort to high pressure sales tactics to convince you to hire them. If the company’s experience, history, and level of service aren’t enough to impress you with their ability to help, don’t let a flashy sales presentation convince you otherwise.

Credit repair companies provide a valuable service to consumers looking to get a fresh financial start, but it’s important to be certain you’re working with a professional. Check references, the Better Business Bureau, and even online complaint boards before you make a decision, and be prepared to shop around in order to avoid being taken in by scam artists. By doing the research before you commit, you’ll have a better chance of avoiding scam artists and actually getting the credit repair services you need.

Posted in credit repair, credit repair companies, credit repair company, credit repair scams | No Comments »



Sep 8, 2008

Credit Repair Scams: File Segregation and EIN

Repair Your CreditOne old credit repair scam that is making the rounds again is the concept of file segregation. Not only does this type of credit repair not work, it is actually illegal and you could face severe fines as well as jail time for attempted fraud. So how can you recognize a file segregation scam? Your first clue should be any credit repair service that promises to give you a “fresh start” or an entirely new credit history. Another clue is any credit repair service that asks you to apply for an Employer Identification Number, or EIN.

Having an EIN is not illegal in and of itself. However, when used in conjunction with unscrupulous credit repair tactics, establishing an EIN may be considered an attempt at fraud. This is because traditionally, an EIN is used to establish credit for a business entity. Misrepresenting yourself as a business, combined with any attempts to segregate your credit history such as using a different mailing address from the one on your personal credit history, can be considered fraud. Companies that claim you can get a clean credit history through file segregation are promoting practices that are known to be illegal. Above and beyond that, this type of strategy will have no effect on your actual credit rating and will not help your ability to obtain credit in the future.

Companies who promote file segregation and EIN are counting on your ignorance of how credit actually works. The EIN may not be linked to your poor personal credit history, however, a lack of negative credit history does not help your chances at obtaining credit when there is no credit history whatsoever. This “blank slate” will also have difficulty obtaining credit from most businesses and banks due to the fact that a new business with no credit history is not a good credit risk. Establishing credit for your new identity is fraught with unnecessary risks, and if you use the EIN legally, your old credit history will be tied to this new number as well. In short, file segregation and applying for an EIN only wastes time, and leaves you vulnerable to criminal fraud charges. Never deal with any company that offers this type of service — it is always a scam.

If you are looking for credit repair solution, steer clear of any file segregation and EIN “solutions” you may be offered. Instead, focus on repairing your personal credit history through proven methods that actually work. By disputing incorrect items on your own credit report as well as other legal methods, you can improve your credit without taking the risk of committing fraud through deception. If you’re unsure of how to repair your credit on your own, make certain that any credit or company you deal with is reputable and has proven results.

Posted in credit, credit repair scams, credit repair service | No Comments »