Credit repair is one of the nation’s fastest-growing industries, and no wonder! The victims of predatory lending, the purveyors of bankrupt businesses and the casualties of the recent real estate foreclosures have created a built-in market that requires immediate assistance. And while some of these companies are legitimate and helpful, there are far too many credit repair scams to count, and you must avoid them at all costs.
Credit repair is largely a guess-and-check system that can be manipulated by professionals, but it is not a business where results can be guaranteed. In fact, Congress declared several years ago that it is unlawful for credit repair services to guarantee specific results.
If you are targeted by a company that promises a certain outcome from their efforts, know that it is probably a credit repair scam. They are breaking serious federal statutes, and they are also lying—it is patently impossible to predict the outcome of credit repair efforts.
“Only $59.95 Per Month!”
You might be willing to pay any sum of money to get your credit report back on track, but this isn’t the way to go. Any business that charges you money before they achieve any results is a credit repair scam. By law, they are required to charge for services rendered, and not up front or per a monthly schedule.
Realize, also, that if you’re paying a monthly premium to a credit repair scam, they are going to take their sweet time consolidating debt and getting your credit history back in prime shape. Only pay when you see results of the credit repair clinic’s efforts.
“I’m a Certified Public Accountant!”
Attorneys and CPAs quickly realized that they could make a quick buck by entering the credit repair arena. They have a title that commands attention and will also claim that they can do this better than anyone else, but you’ll find that it’s a credit repair scam. CPAs and attorneys can legally charge up-front payments and monthly fees for credit repair, even if all they do is send a letter typed by their resident paralegal.
Credit repair scams run off the ignorance of the public. If you don’t know that you can call your own creditors and write letters and negotiate interest rates, then you’ll probably be charged hundreds of dollars for something you could have easily accomplished on your own.
Use Our New Software to Delete Credit History!”
Believe it or not, this line works on hundreds of Americans each year. This is a popular credit repair scam that is rooted entirely in fallacy. There is no software that can remove negative credit history from the bureaus’ files, so don’t waste your hard-earned money. And if there were, it would be a serious crime that would result in jail time.
“Create a Brand New Identity!”
It is impossible to legally create a new identity in the United States—unless, of course, you have been inducted into the Witness Protection program. If you’ve received flyers or e-mails saying that you can start over with a brand new identity, you’ve been targeted by a credit repair scam.
As soon as you send them the money they request, they will teach you how to break the law by providing false social security numbers or EINs. You might be desperate to repair your credit, but it isn’t worth spending ten years in prison.