Credit Repair Scams 3 Tips to Spot Scammers

Credit repair scams are on the rise, and while the Federal Trade Commission continues to pursue bogus credit repair organizations, being a well-informed consumer is your best defense against getting duped. With credit restoration scams becoming increasingly sophisticated, it’s worth revisiting the three most prevalent red flags.

Credit Repair Scams

Tip 1: Before you sign up for credit restoration services, ask any potential credit repair company questions.

Make sure you understand what you’re getting for your money and how your credit report will be handled. Make sure that any credit repair service you use has a privacy policy and security in place to safeguard your personal information.

These promises are usually a fraud because no credit repair company can erase accurate information because of special ties with any of the credit agencies, and creditors do not have unique relationships with credit repair companies.

Tip 2: Don’t pay large fees up front.

Companies that charge thousands of dollars up ahead for credit repair are nearly always a fraud. People who pay see little, if any, progress on their cases, and these companies frequently vanish as soon as the complaints start to pile up. When it comes to credit repair organizations, charging hefty costs up front is unlawful, so if the price appears unusually high, stay away.

Additionally, stay away from any credit repair company that does not uphold the legally required grace period when signing up for credit repair services. If you change your mind within the first few days of your contract for their service, you have the right to cancel and not be billed.

Tip 3: Do your research.

Is the company registered to do business in your state? Are they a member of the Better Business Bureau? Do they have any clients that you can contact as a reference? While the answers to these questions may not identify all potential scammers, any company that has problems following state and federal laws should be avoided at all costs.

If they don’t follow the laws in regards to providing their service, chances are good that they won’t be working in your best interests. When considering any credit repair company, always check both online and offline sources for any information that may point to a scam – don’t stop at online complaint boards, as an absence of complaints is not a guarantee that the company is trustworthy.

If you follow these three tips when you are looking for a reputable credit repair company, you’ll save yourself time, money, and financial security in the long run.

By weeding out the scammers from legitimate credit repair businesses, you can rest assured that your investment in your financial future is a sound one.

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