Use Extreme Caution When Using Credit Repair Companies
Written by ady on December 15, 2008 – 3:20 am -Be careful and watch for credit repair scams. Scams such as these are supposed to relieve you of bad credit, but in reality, they can easily overcharge for their services, get you into potentially illegal situations, and sometimes actually make your financial condition worse. Don’t be taken in by any of these common types of scams.
1) Credit repair organizations that want you to put any false information on an application for credit or a loan, or that want you to get a secondary identity. This is not legal; it is dishonest. Should a credit repair company try to talk you into trying for a loan with anything but factual information, you now know to avoid that company.
These actions could cause you to be charged with fraud, and although it was at the advice of the credit repair company, you will be the one responsible. What could be worse than your credit problems, if not the prospect of adding legal issues, too.
2) Credit repair companies that charge you for items you could just as easily do for yourself at no cost – such as formulating a budget. You should also be wary of companies wanting to charge you money up front.
There is an abundance of great information online for anyone wanting to eliminate credit card debt and repair their credit. Be sure to gather all of this information and use it before you pay someone else.
1) Credit repair companies that take money from you for the purpose of paying your creditors, but keep that money in an escrow account. This scam is very common and is in fact a huge problem for the debtor.
Here are the details for this particular scam: the debtor gives money to the credit repair company intending for it to be paid to the creditor. The repair company deposits the money in an escrow account and it accumulates. The way this should work is for your debts to be paid by the company once the account has the same amount as the amount of your debts. The scam results when the company starts paying themselves administrative fees, but not paying your creditors and your creditors may be increasing your interest charges as a result, or even taking legal action against you. Your credit rating could actually be ruined by this type of credit “help”.
1) Credit repair companies that try to pressure you, make you feel your comments and concerns are not important, or want you to sign a detailed contract without making sure you understand it thoroughly. It is better to spend the additional time finding an organization you can trust than to use a company like this.
5) Companies that claim instant results with credit repair – no matter what condition your credit is in. No credit repair company can legitimately deliver on this type of misleading claim. The fact is, if you have very bad credit, it could take several years to fully repair it. It is generally best to focus you attention mostly on how to eliminate credit card debt, knowing that your credit history will improve over time as a result.
Some companies will claim that they can remove your poor credit history by disputing entries in your credit report. This is false information. True and accurate information cannot simply be removed from your credit report. While a credit bureau must investigate a claim of inaccurate information within 30 days, this does not suggest that the information will automatically be removed. Knowing this, you should steer clear of any credit repair company making this claim.
Hopefully, these tips will help you avoid credit repair scams and allow you to properly locate companies that can truly help you with your credit card debt elimination plans.
Tags: eliminate credit card debt, eliminate credit card debt without bankruptcy, eliminate unsecured credit card debt, how to eliminate credit card debt, legally eliminate credit card debt
Posted in Debt Relief |