Perhaps you were the victim of identity theft and fraud which wrecked your credit scores and credit. Perhaps, you made made some poor financial decisions. Or maybe you home was foreclosed upon after you lost a job during the recent economic recession. What should a consumer be aware of when trying to improve your credit?
Some consumers seek help from credit repair services. After all, there are ads everwhere online and on television by credit repair services offering to help. Some credit repair services have even posted comments on this blog. What should consumers be aware of? How can you spot legitimate credit repair offers from the scams?
Everyone wants to be a smart, informed shopper. The U.S. Federal Trade Commission (FTC) offers six tips to help consumers spot credit repair scams. Credit repair scams will often:
- Demand payment before they provide any services. The Credit Repair Organizations Act specifies that they cannot force you to pay until after they have provided the services promised
- Won't explain your rights nor what you can do for free by yourself
- Instruct you not to contact the three major national credit reporting agencies: Equifax, Experian, and TransUnion
- Promise they can delete most or all the negative information in your credit reports, even when that information is accurate
- Ask you to create a “new” credit identity to get a new credit report by applying for an Employer Identification Number instead of your Social Security number
- Instruct you to dispute all the information in your credit reports, even when it accurate
Obviously, before doing business with a credit repair service you should review your credit reports from the three major credit reporting agencies. Know you rights and use the official website to order your free credit reports as provided by law: AnnualCreditReport.com. Like any other serious financial situation, document everything in writing when doing business with any credit repair service.
If you need more help, check the website for the Attorney General's Office in the state where you love. Many provides assistance and advice about credit repair scams. For example, see the Connecticut or Missouri or Florida attorney general websites.