It’s an unfortunate fact of life in our society that people who feel the most desperate are often the ones often targeted by scammers.
That’s particularly the case for people with damaged credit. There are many scammers promoting ineffective and often illegal methods of credit repair.
The truth is that you don’t need them. At best, these credit repair scammers will waste your time and steal your money. At worst, some of them will damage your credit even further or get you into even hotter water.
How to Spot Scammers
As you rebuild your credit, the best way to avoid getting scammed is to know how to spot credit repair scammers before they can take advantage of you.
- Beware upfront fees. If any credit repair service demands upfront fees before they start any service, be suspicious. This is standard operating procedure for a lot of fraudulent credit repair businesses.
- Beware new social security numbers. One of the most common tactics promoted by scammers is to get you a new social security number. Even though you can get a new social security number, your old credit history will be forwarded to your new number. Think about it! Identity change is the oldest tactic in the book — and the dumbest.
- Beware credit bureau slamming. Another tactic promoted by scammers is to flood credit bureaus with complaints. This may have worked 20 years ago, but with today’s advanced information systems, it’s a huge waste of time. Even if a credit bureau did remove an entry due to a complaint letter, they will put it back later as soon as they confirm the validity of credit entry.
- Beware consultants who don’t tell you your rights. As noted in the Your Rights page, you have federal and state laws giving you several rights and protections. Any legitimate credit repair consultant will start their service by reviewing your rights.
- Beware consultants who tell you not to contact credit bureaus. Credit reporting agencies don’t care whether you have good or bad credit. They’re interested in accurate credit records — especially in light of the pressure being placed on them by the Federal Trade Commission. If your credit record contains erroneous information, credit bureaus need to make it easy for you to correct that data.
- Beware anyone who promises to remove negative (accurate) accounts. Accurate information belongs in your credit report, regardless of their effect on your credit score. They cannot be legally removed. Don’t waste your time on trying to remove negative entries if it’s accurate. Even if you’re successful at getting an accurate entry removed, it will be returned to your credit record as soon as the information is validated by the credit bureau or the creditor.
- Beware consultants who claim FTC approval. The Federal Trade Commission doesn’t recommend private or for-profit credit repair agencies. If anyone claims FTC certification or backing, report them to the FTC right away.
Getting Legal Help
If you really need help to repair your credit — and are willing to pay for that help — the safest method is to speak with an attorney who specializes in credit repair.
Credit repair attorneys know the law and are held to a higher standard by their state bar association. Depending on the attorney, they can handle all communications with creditors and credit bureaus.