Protection From Common Credit Repair Scams
These consumer warning signs were issued by the Office of the Comptroller of the Currency (OCC), on how to avoid common credit repair scams.
For as long as money has existed, there have always been plenty of unscrupulous thieves willing to take it from you.
In the old days, the most common way to relieve people from their cash was to knock them over the head and take it. In today’s world, however, the most common crooks tend to be a lot sneakier.
One common scam you’re likely to see is the credit repair scam. This type of operation is particularly despicable because it targets people who are already having financial problems and have damaged their credit record. The “pitch” you are most likely to hear is one in which a company promises to work with the credit reporting bureaus to remove negative information from your credit record. And of course, they’ll only do it if you agree to pay a sizable fee, usually up front.
There are a few tell-tale signs you’ll see from these types of underhanded companies. First, they’ll ask you to pay their fee before they’ve actually done anything for you. That’s because they know they can’t really help you, and you’ll likely not pay the fee if they don’t get it in advance. Second, they may advise you to contest all the negative information on the report, regardless of its accuracy. And third, they may encourage you to do something illegal, like create a credit alias or fake identity. We strongly recommend running away from any company that follows any of these practices.
It is important that you understand one key point about “repairing” your credit record, and that is that no one can legally remove information from your credit record if it is accurate. In other words, the promises these companies make are impossible to keep. The only way negative information can be removed is if it is on there by mistake or has expired, and if that’s the case, you can correct the problem yourself for very little or no money.
It’s true that mistakes can frequently be found on people’s credit reports, which is why it’s a good idea to request a every year from the credit reporting bureaus to be sure they’re accurate. However, if you have a poor credit record, there is only one sure way to clean it up, and that is to improve your credit practices. In time, the blemishes will disappear and your credit rating will get better and better.
Here are a few other common scams:
The Fake Contest Scam. You receive a phone call informing you that you’ve just won a contest that you don’t remember entering. Usually, after they’ve gotten you all excited about your prize, they ask for a credit card or bank account number to verify your identity. They then use the number to steal you blind.
The Home Improvement Scam. Someone knocks at your door and tells you that you have some serious problem with your home, such as a warped roof, cracked driveway, or termites. Eventually, they get you to agree to the work and then ask you for money up front to purchase supplies. If you say yes, you’ll likely be sorry. Either they’ll take off with your money or do a very poor job.
The best way to avoid these scams is to always be suspicious of anyone asking for your credit card number, social security number or bank account number, especially if you didn’t initiate the call. And don’t agree to any type of work or service until you’ve shopped around.
