Credit Repair Scam Indications
Many people have ended up with a bad credit file as a result of unwise credit card use. One of the options of cleaning up your record is to hire a company to do the dirty job for you. There are plenty of companies offering this service, but you should address them with caution in order not to end up caught into a credit repair scam.
One of the scams usually used to attract clients is the company stating that it is in good relations with the credit bureaus. They say that they will use their connections to get you rid of the bad credit report. Additionally, they state that they know some kind of a regulation that will sneak you out of the bad condition in which you are. Such statements should serve as a red flag for you. Don't use the services of such companies. A temporary clean-up may occur while the investigation occurs. The company will show you these temporary results so that it takes its commission.
You should have in mind that under the Credit Repair Organizations Act, companies are not allowed to take any money until the promised services is realized. If you are asked to send the commission before the service is provided, don't do it.
Another scam usually used is the assurance that the credit repair company will persuade the credit issuer that you are not holding the particular debt. A plan for this will be provided by the company including flooding the credit card issuer with claims against the accumulated debt. At the end the issuer is supposed to drop these claims.
You should also avoid credit repair companies that promise you to provide you with a clean credit report. This is usually done by the application of a new taxpayer identification number or Employer Identification Number (EIN). As a result you are told that you can start to set a new credit report from a scratch. However, such actions are against law. Additionally, at the end of the day this scam will fail, because it will include the same name and contact information of the credit holder. All that will be changed will be the number, but not the credit history.
Another scam that is combined with the previously mentioned ones is the attracting of clients to a particular phone number on which they can get advices on how to heal their credit. However, such a call will come very expensive since it is charged on per minute basis and will aim at keeping you as long as possible on the phone.
Finally, all the offers you receive for credit repair should be researched carefully. Most of the scams lack a lot of details, so the less information you can get the more suspicious you should become.
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