Credit Repair: Be on the Alert for Scams.
By Susan Doktor
Bad credit can happen to the best of us. And people with great credit are rarer than you think. Only 1.2% of Americans have a perfect credit score of 850. Around 16% have credit scores under 579, which credit bureaus and lenders characterize as poor.
You’re probably familiar with the financial benefits of having good credit, including having access to credit when you need it and securing lower interest rates on mortgages, car loans, and credit cards. Having good credit can save you many thousands of dollars over a lifetime. So if you’ve landed in a bad credit bind, it’s a good idea to fight your way out of it.
Some people turn to professional credit repair companies to do battle for them. But the credit repair industry is rife with unscrupulous merchants. Credit repair scams are common and can cause more damage than bad credit itself. So we’ve put together a checklist to help you find a reputable credit repair company to assist you with polishing up your credit profile.
Recognize the Warning Signs
· It’s a bitter pill to swallow, but no company can remove legitimate negative remarks from your credit report. A company that tells you it can remove a bankruptcy from your report is flat-out lying. Steer clear. Your bankruptcy will disappear on its own in about seven years.
· If a credit repair company tells you not to contact your creditors or credit reporting bureaus yourself, chances are they’re hiding some unscrupulous or even illegal practices.
· If a credit repair company instructs you to dispute accurate items on your credit report, it’s asking you to commit fraud. A federal crime conviction won’t do much for your reputation, credit or otherwise
· Some credit repair scammers will tell you they can create a “new credit identity” for you. They may give you a number, sometimes called a CPN, and tell you to use it to apply for new credit. The number is fake. Once again, it’s a crime to use it. Some scammers are also in the business of identity theft. If you become party to that kind of activity, you could be sentenced to up to 15 years in prison.
How to Spot a Legitimate Credit Repair Company
· Reputable credit repair companies will give you a copy of your Consumer Credit File Rights before you sign up for services.
· Most credit repair companies charge an initial start-work fee. They don’t bill you for ongoing services in advance.
· Reputable companies explain their plan benefits and pricing information in detail. They have customer service representatives who can explain anything you don’t understand. And they allow you to cancel your contract at any time without penalty.
· Legitimate firms provide detailed monthly activity summaries and updated credit reports as they continue to provide service.
At Rodriguez Law Group, we strive to keep our clients well-informed about their legal rights—and make sure they’re always operating on the right side of the law. Contact us today at (626) 888-5206 for a free consultation on estate planning, foreclosures, personal injury, and more.
Susan Doktor is a journalist, business strategist, and principal at Branddoktor. She writes on a wide range of subjects including finance, technology, and government affairs. Follow her on Twitter @branddoktor.