Don't Get Ruined By False Claims Of Credit Repair Services |
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Some credit repair services companies cheat consumers by making misleading claims about "cleaning up" bad credit reports. Erase bad debt! Remove negative items from your credit report! These are some common claims they use to bait the customer? This article explains the limited services that credit repair services companies can legally perform, and reveals some companies' misleading claims and illegal practices.
So-called credit repair services companies claim they can remove negative information from credit reports. Advertising as Credit Advisors, Credit Rating Correction Services or Credit Consultants, they trumpet variations of this message: "Turned down because of bad credit? We can help!" Many of these companies charge thousands of dollars for the promise to clean up bad credit reports. But the truth is they can only do what you could do yourself for free. Nobody can remove negative information that is accurate from your credit report. No credit repair services company has a secret ability to remove all negative information. But this doesn't stop their claims, which are deceptive and misleading and made with intent to lure gullible customers. One tactic they employ is to bombard credit-reporting agencies with requests to verify information. If a credit reporting agency cannot verify an entry within 30 days, it will remove the information from the report. But if the information is later verified to be accurate, it will go back in the report. Before signing a contract with a credit repair services company, remember that you may obtain a copy of your credit report on your own. You have the right to dispute incorrect entries in your credit report. Credit repair services companies often "guarantee" to get you a credit card, regardless of your credit history. In fact, these companies seldom honor their guarantee. Sometimes, they'll just take your money and run. If these credit repair services companies get you a card at all it often will be a secured bank credit card, with high up-front application fees, that requires you to deposit and keep several hundred dollars in a savings account, or a card that only allows you to buy items in a catalogue from a business that you probably never heard of. (You can apply for a secured credit card by yourself. For a free list of banks that do not charge application fees for secured cards, see the information from Consumer Action web site). Credit repair services companies use various media to advertise. Sometimes they require consumers to dial a 900 telephone number to get more information. Calls to 900 numbers can cost $2 or $3 a minute, so listening to a few minutes of information about the cards can be expensive. Some credit repair services companies try to get people a credit card by having them apply using financial information of other people with good credit histories. It is a criminal act and totally illegal. Law enforcement agencies have shut down many credit repair services outfits, but it is hard to stop a fraudulent credit repair services outfit unless people complain about it. Therefore, be careful about responding to credit repair services advertisements and be sure to complain to the agencies listed below if you think a credit repair services company took advantage of you. Many legitimate companies exist that can help you with your debt problems. But how do you spot a scam offer? Easy, they'll ask you for their fees up front. By law, credit repair services agencies cannot ask for payment until they've provided the service they promised. Additionally many states require that a credit repair services service, whether they are for-profit or not-for-profit, must provide you with a detailed written contract, an explanation of your legal rights, and the opportunity to cancel any signed contract within 3 days. Also, be aware that a credit repair services offer could be an attempt to steal your identity by getting you to provide personal information such as a Social Security number, bank account and credit card account numbers! Be sure of whom you are dealing with before accepting any offer to help you repair your credit. Those who don't can have their credit ruined further and create more debt problems! |
