When bad credit comes a-calling, you may find yourself tempted to employ the services of a credit repair agency to remedy your problems. Certainly, some credit repair agencies are legitimate, providing a valuable and much-needed service to their consumers. What you should also know is that these companies cannot fix every problem, with some of the tough work best left in your hands.
Scam Awareness
To separate the good credit repair companies from the bad, it is important to be aware of a number of scams that take place, each with the purpose of misleading and defrauding you. Read on and we will look at some of the claims and scams out there.
A software program that magically removes negative information from your credit report.
Firstly, credit reports are controlled by the credit bureaus and what this means is that there is no software that can possibly manipulate the programs of TransUnion, Experian, and Equifax – the three consumer credit bureaus. Secondly, if a credit repair agency managed to make changes to your credit reports, then they would be doing something that is illegal. It takes more than a few clicks of the mouse to improve your credit — don’t fall for this scam!
Your entire credit report is subject to dispute.
This scam is as problematic as it is silly. For one, not all the information in your credit report is wrong. For another, only inaccurate information should be disputed. Negative information that is accurate cannot be removed unless a statute of limitations has passed. That’s a very narrow window, not something your want a credit repair agency to handle.
You are offered a new taxpayer identification number.
One scam involving a credit repair agency suggests that consumer should take out a new taxpayer identification number to hide bad credit history. Typically, this process involves applying for an employer identification number with the IRS, what you would receive if you were to launch a new business. Instead of using your Social Security Number to apply for new accounts, you would use your ill-gotten EIN. Do not think for a moment that the IRS is unaware of this practice — you will get caught and will likely be prosecuted.
Pay me up front for services not yet rendered.
Paying a credit repair agency money up front, especially a large amount before any services are provided should be a warning sign to you. This is especially so as most states regulate this practice. Do not deal with a so-called credit repair specialist operating outside of the US either — without legal jurisdiction, your money can be taken and most likely will never be recovered.
Scam Considerations
If the credit repair agency you are interested in does not participate in any of the aforementioned scams, they may be worth your consideration. However, if you are looking for a fast remedy for your credit woes, you will likely be disappointed.
It took you a while for to become a bad credit risk and it will take you at least as long for your credit to be repaired.
Personal Repair
The road to personal credit repair can be handled by you personally. First, obtain copies of your credit reports and review all three to determine that the information about you is current and correct. Second, report mistakes directly to the respective credit repair bureau. Third, obtain your credit score. This information will provide the benchmark for improving your credit. Fourth, keep up with each of your debt obligations. Avoid payment or make late payments will only tarnish your record further.
Small improvements in your credit can be realized within a few months, but long term gains can take much longer, perhaps years. Stay with it and you will eventually see the benefits of your hard work.
See Also — How to Restore Your Once Good Credit
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