Avoiding Credit Repair Scams

Maintaining a good credit score is important for anyone seeking a loan or looking for a job. When a credit score is less than desirable, many look for ways to repair it quickly and easily. Such people can become victims of credit repair scams unless they keep some key facts in mind.

First, consumers can access their credit reports without the help of a credit repair company. All three of the major credit reporting agencies, Equifax, Experian, and Transunion, make credit reports available online, usually for free or a small fee. Check out all three reports carefully, and contact the agencies if any errors are found. The agencies involved will work with you to clear up any mistakes. Secondly, you have the right to add an explanation to your credit reports, so if your score has dropped due to job loss, prolonged illness or some other legitimate reason, you can place a statement on your report.

If you are interested in getting assistance with cleaning up your credit reports, here are some “red flags” to look for when deciding whom to consult:

Beware of companies that contact you by email, cold calls over the telephone or flyers sent in the mail. Many unsolicited contacts are questionable. Check for reviews of any such company, and contact your local Better Business Bureau and consumer credit counseling agencies in your area for information on such businesses.

Never pay a company anything up front. Any reputable business will require payment only once services have been rendered. Such companies also are covered by state and federal consumer protection laws, which means they must give you a written contract setting forth the amount to be paid, your rights and their obligations, and all other conditions. You also have the right to rescission, which provides you three days to change your mind without penalty. Do not bow to pressure to waive any of these rights.

Do not believe anyone claiming that they can get rid of accurate but negative information on your credit reports. Such information remains in place for seven to ten years. They cannot provide you with a “new” Social Security or federal identification number as a way to provide a fresh start. Such efforts constitute fraud and could entail a violation of state and federal law.

The best place to go for help is a local credit counseling service. Most communities have resources where you can meet face to face with a trained credit counselor, who will assist you in organizing your financial matters and help you learn healthier financial habits. Check your phonebook or the Internet for a service near you.