Top 3 Credit Repair Scam Tactics

Are credit repair services worth the time and money? The business of credit repair—for all intended purposes—appears to be a study in contrast. On one hand you have these fly-by-night credit repair clinics, which over recent years have largely made a name for themselves as being fraudsters, bilking millions of dollars off of innocent consumer who were struggling to restore themselves back to financial health. On the other hand, you have a growing number of consumers, who now feel that self-credit repair is a better option. What does this leave the average consumer to do? Although the industry has been tainted over the years by a great many of these rogue organizations, there are now a growing number of organizations that exist to help consumers get a handle on their personal finances—namely, non-profit consumer credit counseling services (CCCS). Unlike its for profit cousins, CCCS are 501c (3) tax exempt by the IRS, registered with the better business bureau (BBB), and is mandated by its state charter to offer free credit and debt education services. Should you pay $500 upfront for credit repair services? Absolutely not! In fact, it’s against the law, as mandated by the credit repair organization act (CROA). The list below goes on to showcase the ugly side of credit repair, highlighting the top 3 scams organizations use to con vulnerable consumers of his and her hard earn monies:

Scam #3 Charging Very Large Upfront Fees...

Again, should you pay $500—or better yet, a $1000 up front fees to repair your credit? Absolutely not! It doesn’t matter if the organization claims to be a friend of the CEOs of Transunion, Equifax or Experian, the fact of the matter is effective credit repair takes time—regardless of a large up-front fee. Put simply, not even a million dollars can repair five years of poor financial decisions. Nevertheless, how do you know when you’re dealing with a rogue organization? It’s simple: find out how much they want upfront before services, and if exceed $150, which is the industry standard, then you could be dealing with a bunch of fraudsters.

Scam #2 Making Bold and Outrageous Claims…

“Credit Repair in 24hrs!” “We Offer a New Identity!” “We Guarantee Complete Credit Repair!” All these represent very bold claims that very few organizations can back up. In fact, it’s highly improbable that any credit repair organization (CRO), be it a credit repair law firm or credit repair clinic, can back up any such claims made to credit repair. Quick credit repair is a fallacy! Theoretically, credit repair is part art, part science with a little luck thrown in for good measure. To put it in more concrete terms, bold claims on credit repair is yet another major sign that someone, somewhere is being dishonest.

Scam #1 You Can’t Repair Your Own Credit…

Part scam, part credit myth is the very idea that consumers cannot repair their own credit. This is just a flat out lie, and also a violation of CROA. In fact, as mandated by federal law, CROs who engage in credit repair must inform its consumers that they indeed can fix their own credit reports. Dishonesty runs rampart when thousands of dollars are at stake; nevertheless, you shouldn’t allow thieves to sell you a bag of goods based on a deception. Thus, it goes without saying that, if for any reasons you run across an ad on the internet, magazine or newspaper, that is making such a claim, it might be best that you stand clear. Below is a quick list of fact in regards to self-credit repair:

  • You have the right to dispute any inaccurate or incomplete information on your credit report.

  • Credit reporting agency must investigate every dispute without charge to you.

Anything a CRO can do for you legally, you can do for yourself at little or no cost

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