Avoiding Credit Repair Scams
There is considerable advice floating around stating that people undergoing financial difficulties with less than perfect credit scores should seek to repair their own credit and avoid credit repair scams.
These individuals and companies would have you believe that all credit repair companies are scammers. This is not the case. While scams certainly abound, there are many legitimate credit repair agencies.
Not everyone has the ability or the time to undertake personal credit repair. So they need to find legitimate and affordable credit repair while avoiding scams.
It was concern regarding the scams that prompted Congress to pass the Credit Repair Organization Act that placed credit repair programs under federal regulation. According to the Act, a credit repair agency cannot ask for payment until they have rendered services.
The Federal Trade Commission, in a warning against getting involved with scammers, stated that a red flag for scamming was a request to pay for services that had not yet been rendered.
Another red flag is the company’s recommendation that the consumer refrain from establishing direct contact with the three credit reporting agencies,
Experian, Equifax, and Transunion.
Some scammers recommend that you perform an illegal action thereby committing fraud. They advise you to obtain an EIN number (an identification number that is given to businesses for tax purposes) and use it in place of your social security along with a different mailing address to establish a new credit
identity. This in itself is illegal. But if this is done through the US post office, than there is a case of mail fraud as well.
2009 | Avoiding Credit Repair Scams