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When people find themselves deep in debt, they begin cutting down on their unnecessary expenses. Many decide to plan out a budget and try to stick to it as best they can. But sometimes all your efforts are to no avail, and unpaid bills defeat late payments easily. That is when your credit score starts to drop. It is a vicious circle, a bad credit score may prevent you from taking a loan to pay off your initial debt, inquiries are performed on your credit report and the score sinks even lower.
With time and effort, it is possible to achieve credit repair free of charge. But some feel they are not up to the challenge, and decide to hire someone to do the job for them. That is when professional credit repair agencies come into the playfield. In this article you will find some of the most common ways of credit repair fraud. Of course that there are many credit counselors who are very honest and reputable, but you need to know that not all of them are. Hopefully, after reading this article, you will be aware of what is acceptable when it comes to repairing someone’s credit, and what is not.
Common Scam #1
This is the most common of scams, but also the easiest one to recognize. Some companies ask for money up-front to repair your credit even before they begin the process. So you pay what they demand, and they run away with your money. It is as easy as that. Beware of any institution asking for up-front fees as this procedure is illegal.
Common Scam #2
A highly dangerous con, and a very common one at that, is to convince you to apply for a new taxpayer identification number or employer identification number. They will tell you that this will get you a brand-new credit history, but of course they will fail to mention that this practice if completely illegal. They will get your money and run, and you will have committed fraud. Still, you will be linked to your old debts and your old credit file, as the new one will be under your name and address.
Common Scam #3
Unappealing information on your credit report cannot magically go away. Provided that the input is incorrect, it will be possible to fix. The process takes time, of course, but it is feasible. On the other hand, if the negative input is precise, there is no way to make it disappear. What is more, it will stay for years on your credit history. Many companies state that they have special contacts inside credit bureaus who can make negative citations go away. This is completely false. They will file claims against these negative inputs, and the bureaus will correct this apparent mistake while they conduct investigations. You will receive a supposedly clean report and the credit repair agency will happily get your money. After the investigations finish and the so-called errors are found to be accurate, they will be placed back in your report.
These three examples are the most common fraudulent practices carried out by credit repair agencies. If you keep your eyes open, it will be possible for you to pick up on any suspicious signs which will alert you against scams. Remember, better be safe than sorry.
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