Home > Credit Repair > Protect Yourself from Credit Repair Fraud
Protect Yourself from Credit Repair Fraud |
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Credit repair is a general term often applied to the controversial practice of improving or rehabilitating one's financial reputation or creditworthiness among creditors. Changing your spending habits is the only way to improve a credit rating damaged by poor credit habits. Also, it is the only one that is effective in the long run. A credit repair campaign is most effective in cases where creditworthiness was damaged due to incorrect or misleading information in a credit report. In short, such a credit repair campaign involves obtaining copies of one's credit reports, and formally disputing erroneous or misleading information found there. This process, though it sounds simple, can be quite complicated and time consuming in many countries. And the United States is no different. This has resulted in a spate of credit repair companies to help the consumer with this process. There are both profit making and nonprofit organizations formed to assist individuals in the credit repair process. But they all charge a fee, even though governments have repeatedly increased its regulation of this industry, because of predatory practices. So, it's risky to trust anyone to help you repair your credit. It is estimated that credit repair companies have milked Americans out of more than fifty million dollars. And a majority of the credit repair companies were started by entrepreneurs with a penchant for marketing. As a result gullible consumers have flocked to these "credit doctors" only to discover that their advertisements are far more impressive than the results. Many who have considered credit repair will tell you that hiring a credit repair company is like Russian roulette. Many of them are effective and legitimate, but it is difficult to tell if the one you chose fell into the category until it's much too late. Most of the scam artists who promote these credit repair services can't deliver what they promise. Not only can they not provide you with a clean credit record, but they also might encourage you to violate federal law. It is fraud under federal law to lie on a loan or credit application, misrepresent your Social Security number, or to get an Employer Identification Number from the Internal Revenue Service under false pretenses. And many of these companies will advice you to do exactly these. Only time, deliberate effort, and a personal debt repayment plan can improve your credit, regardless of what the frauds tell you. When you approach a credit repair service, remember that legitimate approaches, to correct erroneous, misleading, or outdated entries on a credit file, to negotiate with creditors, and teach better debt habits, takes months if not years before there are significant results. So if a service promises something else, the best thing to do is to run or you might be in more trouble later on. Another sure sign of credit repair fraud are guarantees. Remember no credit repair company is so good that it can guarantee a specific outcome. If they do, it'd be like a defense lawyer guaranteeing that the jury will find his client innocent. A warranty, where the credit repair company promises a refund if certain results don't occur, is a better and more realistic claim. Companies that want you to pay for credit repair services before any services are provided are out right frauds. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the promised services. You should also keep away from companies that fail to brief you on your legal rights as well as that you can do credit repair by yourself and that too for free. Suggesting that you try to invent a new credit report by applying for an Employer Identification Number to use instead of your Social Security Number or advising you to dispute all information in your credit report or create a new credit identity are all signs of fraud. And if you follow their advice for credit repair and commit fraud, you will be exposing yourself to prosecution. You need to be really careful when choosing a credit repair service. If you prefer to do the credit repair on your own and save the money, otherwise spend on a service, there a lots of self-help information on credit repair, available nowadays. This is to motivate individuals to proceed with their own credit repair campaign. |
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