Be careful and watch for credit repair scams. Instead of freeing you of some of your burden, these scams usually overcharge you, get you involved in an illegal activity unknowingly, or make your situation worse. Watch out for the most common of them.
1) Scam organizations that promote applying for credit or a loan with incorrect information or that try to get you to a second identity. Not only are they promoting dishonesty, they could be putting you in legal trouble. Should you find that a credit repair company is trying to get you to apply for a loan or credit with false or misleading information, you now know to disassociate yourself from them.
Fraudulence could be charged if you follow their advice because it is your responsibility, even if the credit repair company made the suggestion. It would be very unpleasant, to say the least, to have to deal with both credit and legal problems at the same time.
1) Repair companies that bill you for doing work that you could have done for yourself – like putting together a monthly budget. Also, up front charges should make you concerned about the company.
There is an abundance of great information online for anyone wanting to eliminate credit card debt and repair their credit. Do this before you pay someone else for much of the same information.
3) Credit repair companies that hold payments from you in an escrow account, which is to be paid to your creditors. Although common, this is a scam that turns out to be a huge problem for unsuspecting debtors.
Here’s how this scam works: you provide money that you intend to be used by the credit repair company to pay down debts. The repair company then puts the money in the escrow account where the balance grows. The notion is that the company is to use the money to settle your debts once the account grows to the same amount as your debts. You can get scammed if the company starts paying themselves all sorts of administrative fees, but not taking card of your creditors so that they start increasing your interest charges and possibly starting legal action against you. Your credit rating could be further damaged using this so-called credit help.
1) Credit repair companies that try to pressure you, make you feel your comments and concerns are not important, or want you to sign a detailed contract without making sure you understand it thoroughly. Leave well enough alone and do not trust a company like this.
5) Companies offering to repair your credit instantly, without taking into consideration the current condition of your credit. This is not an honest claim since no legitimate company can deliver on this promise. As a matter of fact, fully repairing a bad credit history can sometimes take years no matter what the company claims. It is generally best to focus you attention mostly on how to eliminate credit card debt, knowing that your credit history will improve over time as a result.
There are cases whereby the repair company will claim to clear poor credit items from your credit report by disputing them. This information is not to be believed. If an item is true and accurate, it cannot simply be removed from your report. While a credit bureau must investigate a claim of inaccurate information within 30 days, this does not suggest that the information will automatically be removed. Knowing this, you should steer clear of any credit repair company making this claim.
Hopefully, these tips will help you avoid credit repair scams and allow you to properly locate companies that can truly help you with your credit card debt elimination plans.