Finance & Loans

Avoid credit repair scams

Credit problems are seldom solved by seeking help from credit repair businesses. The truth is most credit repair offers are scams, aiming to further destabilize a person’s already faltering credit profile. Even the federal government advises against relying on credit repair services, and recommends taking legitimate, realistic and honest efforts to nurture credit profile back to health. A person in need of credit rebalancing has to be aware of the credit repair scams being proliferated on the Internet and thus be able to avoid falling into their trap.

One of the most common tactics of unscrupulous credit repair agencies is offering quick credit cleaning in exchange for a fee. These agencies promise their victims a clean slate after which loans can be made almost immediately. Legally, it is impossible for credit agencies to clean a person’s credit, and thus the supposed benefactor will be left with the same ugly credit profile and less money in his or her pockets. There are various signs that a credit repair agency is up to no good, and people seeking credit help should be made aware of them.

The number one sign of a credit repair scam is demanding full payment of services before any actual service is rendered. The credit repair agency also does not inform the benefactor of his or her credit rights and what options can be taken free of charge. They also advise against the benefactor contacting national credit reporting agencies to prevent detection of their illegal trade. The scam agency may even advise on creating a new credit identity for the benefactor, plus a new credit report, through application of a new employer identification number to substitute for the mandatory social security number.