Your credit scores display your financial health, whether you can buy a house or a car. If your score goes down, you would most likely want to bring it back up as soon as possible. Or maybe your credit is bad or damaged and you want to repair it.
Here come the credit repair services. Credit repair services can help you repair and increase your credit score.
Unfortunately, though, there are some credit repair scammers out there who will ask you for money before providing their services. These fake services prey on consumers who seek help from them.
Some of these cheap credit repair scam services promise to get rid of negative credit information on your credit report, even though the information is current and accurate.
There are legitimate services, like TheCreditpros, that can help you to repair your credit, but it is important to watch out for scams.
How to Spot Cheap Credit Repair Scams?
Cheap credit repair scams mainly focus on people who are behind on loan and credit card payments or people who are worried about the state of their credit.
Some credit repair scammers compel people to purchase their services by promising them that they will remove negative information from their credit report, even if it is accurate.
Some people who are financially down and have problems with their credit often fall prey to these cheap credit repair scams. Their services just carry away those people by giving them false promises.
The charges depend upon the service they choose.
Here are some of the common cheap credit repair scams you should be aware of:
- File Segregation Credit Scam.
- Tradeline Renting Credit Scam.
- Credit Privacy Number Scam.
Signs of Cheap Credit Repair Scams
Cheap Credit repair scammers will promise to make your credit repair quick and easy. When they are done, however, your score will still be low and will remain the same.
There are a few signs that you should look at when working with credit repair services.
The company will ask you for a payment before starting their services. The Credit Repair Organization Act (CROA) does not encourage giving credit repair companies any payment before you start their service.
Most of the scammers know that many people are not aware of this and they ask for a huge up-front payment.
Some cheap credit repair scam services will not allow you to withdraw from them unless the fees are paid. By law, all credit repair services must provide at least three days to cancel your services and there are no cancellation charges.
According to the Federal Credit Repair Organizations Act, credit repair services cannot receive payment until their committed services are completed.
You should be aware that all forms of up-front payments before the committed services are completed are illegal.
Some cheap credit repair scam services will assure you that they will remove negative information from your credit report, even if it is a piece of current and accurate information.
They also promise to increase your credit score in a couple of weeks.
This cannot be done. They are giving you false promises and you shouldn’t believe them. It takes at least 30 days to see the reflection of credit scores on your credit report.
New Credit Identity
In a new credit identity scam, the scammer will sell you a stolen security number. By doing this they are looting out your money and leaving you unaddressed. Then you will get in trouble for committing multiple federal crimes and can face fines or even go to prison.
No Legal Rights Explanation
These credit repair scams will not tell you about your legal rights. For example, you can get your credit reports for free to dispute errors.
They will also not let you know that you can cancel your recently signed credit repair service. You can cancel this service within three business days.
Prohibits You from Contacting the Credit Bureaus
Cheap credit repair scams try to dissuade you from contacting the three credit bureaus (Experian, Equifax, and Transunion) directly.
The legit credit repair services act according to the federal laws and the Credit Repair Organizations Act.
For example, if you are working with a service that is not living up to its word, you can sue them in federal court. You can take other actions against them, too.
What to Do if You Are Scammed?
If you realize that you have been one of the victims of a cheap credit repair scam, check out these options:
- Report to your state attorney general.
- Register a complaint to Federal Trade Commission and the Better Business Bureau.
- Consult an attorney.
Reporting to Your State Attorney General
The Attorney General is the top legal attorney of their state. They act as the “People’s Lawyer” for their citizens.
So you can report the fake organization to them to take necessary actions against your credit repair scammers.
File a Complaint to the Better Business Bureau
By raising a complaint with the Better Business Bureau (BBB), they help you solve the credit repair scam issue through their scam tracker.
Consult with an Attorney
You can consult an attorney if you want to take legal actions against the cheap credit repair scammer.
They will guide you through the necessary steps to sue the cheap credit repair scam service for your losses.
Can Credit Repair Companies Fix Your Credit?
A legitimate credit repair company will surely fix your credit-related issues, like removing negative items from your credit report that damage your score.
They also help with creating a monthly budget that builds your credit score legally. A credit repair company makes the process simpler and easier.
You can also contact TheCreditpros for any credit-related issues. They help to identify the damaging inaccuracies on your credit and get them removed! TheCreditpros also provide credit education tools and help to educate you about your credit score.
As the credit repair industry grows, it is becoming much known for its scams. As a result, anyone who is looking to outsource their credit repair should exercise caution.
Check into recent cheap credit repair scams if they ask you for money before they start to do their service, or when they make their statements only through word of mouth and not by signing a written agreement.
There are credit repair services that act according to Credit Repair Organization Act (CROA) standards. You can approach these companies to file disputes with the credit bureaus and learn some good credit practices to repair your credit.
Frequently Asked Questions
- How do I know if my credit repair company is legit?
Credit repair services:
- Do not ask for payment before starting their service
- Do not make false promises that they cannot or will not keep.
- Why should you avoid credit repair scams?
Credit repair scammers sell stolen social security numbers. Using those numbers they commit identity theft. When approaching a new credit repair service, you should stay away from those fraudulent companies who want to take advantage of you.