Credit Repair Agencies

Are companies which claim to be able to fix or erase bad credit too good to be true? Well, in a word YES – in a lot of cases.

As with all walks of life there are good and bad, however when it comes to matters of finance and money when the going gets tough the tough get sneaky – out of the woodwork appear huge numbers of companies and individuals making promises they cannot backup, and this current financial turmoil is no different.

You will have seen advertisements in newspapers, on TV, and on the Internet from credit repair agencies offering credit repair services. They all make the similar claims:

“Credit problems? No problem!”

“We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”

“We can erase your bad credit — 100% guaranteed.”

“Create a new credit identity — legally.”

Let us start with a basic guide on the above statements – any company which makes these type of claims is most likely up to no good. The law is VERY clear on credit repair – bad but accurate credit information cannot be legally removed from credit files, and for the record, nor can new credit identities be created, bad loans be removed and so on. The fact is there’s no quick fix for creditworthiness – if it is bad and bad for a reason then sadly no amount of trickery is going to help you – hard work however will. You can improve your credit report legitimately, but it takes time and effort – there are no quick fixes.

Recognizing Credit Repair Scams

Each and every day, nefarious credit repair companies target consumers who have poor credit histories with promises to clean up their credit report, helping them to get a vehicle loan, a cheaper home mortgage, insurance, etc – once they pay them a fee for the service. That last bit is the real clincher….

These companies cannot supply you with an improved credit report for you using the tactics they promise. As stated previously - It’s illegal: No one can remove accurate but negative information from your credit report. So having paid hundreds or even thousands of dollars in fees up front you are left with the same poor credit report and they have your money.

So, how to tell if the credit repair agency is up to no good:

• Well, most importantly – they demand money up front. If they ask for money in advance the advice is simple – WALK….Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.

• The Credit Repair Company doesn’t inform you of your rights and what you can do for yourself for free.

• The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.

• They recommend that you do not contact any of the three major national credit reporting companies directly.

• The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number. This is fraud and can get jail time.

• The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness. This wastes your time and that of the credit agencies – hardly a way to impress them!

To continue reading see Credit Repair Agencies Part 2

Filed under: Credit Repair Agencies

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