bad credit repair

Since the beginning of the current financial crisis and the credit crunch in 2007, many people have found themselves in need of significant credit repair. Those who were borrowing to service their debt – both companies and individuals – found their access to credit diminished, if not totally wiped removed, and consequently their credit scores took major hits as they defaulted on debts or fell behind on servicing them.

As a result, there has been a boom of new companies offering all kinds or credit repair services. Most of these companies are perfectly legitimate and legal, but there is a small minority engaged in unethical or illegal behavior as well. These latter are the scams and the savvy customer needs to keep an eye out for them.

The first sign that a credit repair service may be illegitimate is if it makes impossible promises such as “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!” Realistically, credit repair companies can not do anything that you can not do yourself, but if you decide to use a company, be sure that they do not make impossible promises, like removing bankruptcies from your credit record before the requisite ten year reporting period is over. Bad credit repair can only go so far! Believe it or not, there are even Christian debt reduction companies that make false claims like this.

Credit Repair Scammers

Another telltale sign of a credit repair scam is any company that requires you to pay before they have actually rendered any services. According to the Credit Repair Organizations Act, it is flatly illegal for a credit repair company to require you pay before they have performed the services promised. Failing to take advantage of your rights under this law is tantamount to simply giving money away, because as soon as the scammers have your money in hand, they have no incentive whatsoever to do anything else for you.

Any credit repair company that recommends or suggests that you do not contact any of the “Big Three” credit reporting agencies – Equifax, Experian, and TransUnion – are also likely to be scams. There are no negative effects to you contacting the credit reporting agencies directly. Further, failure to contact them means that you can not see whether or not the credit repair company has actually managed to accomplish anything at all.

Finally, if the credit repair company suggests that you do something illegal not only is it a scam, but if you commit a crime at their request, it is you – not them – that will be facing criminal charges. The most common recommendation is to apply for and obtain an Employer Identification Number (EIN) from the IRS to use instead of your legitimate Social Security Number (SSN). Not only will this method fail to repair credit, it could land you in jail!

The bottom line – if you are looking for credit repair, make sure that it is legal credit repair!

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Tagged as: bad credit repair, Credit Repair, credit repair scam, credit repair scams, credit repair service, credit repair services, credit report repair, repair credit

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