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.