Use Extreme Caution When Choosing a Credit Repair Company
Monday, December 29th, 2008 Subscribe To Our Feed
Be careful and watch for credit repair scams. These deals usually promise help with damaged credit, but what usually happens it that they charge far too much, get you into an illegal situation, or otherwise make your financial situation worse. Educate yourself on the more common of these.
1) Scam organizations that promote applying for credit or a loan with incorrect information or that try to get you to a second identity. This could get you in trouble, in addition to being just plain dishonest. Should you find that a credit repair company is trying to get you to apply for a loan or credit with false or misleading information, you now know to disassociate yourself from them.
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. It would be very unpleasant, to say the least, to have to deal with both credit and legal problems at the same time.
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. Also, you should be concerned if the company asks for 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 accept payments from you that are to be paid to your creditors, but that are kept in an escrow account. This is a huge problem for debtors, since it is a scam.
This is the way this scam works: the debtor pays money to the credit repair company, presumably to pay off their debts. The money accumulates in an escrow account that is opened by the credit repair company. The idea is that the company will pay off your debts eventually once the balance of the account is equal to the amount of your debts. The real problem is that the company may be taking significant amounts of money from the account as an administrative fee, but meanwhile your creditors are not getting paid are increasing your interest charges, and even making legal claims against you. The result of all of this is that your credit rating could suffer even more.
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. Leave well enough alone and do not trust a company like this.
5) Credit repair companies that offer fast or even “instant” credit repair – no matter the current condition of you credit. This is without a doubt a misleading claim that no credit repair company can deliver on. 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.
In some cases, these companies claim that they are capable of removing poor credit history from your credit report by disputing it. This information is not to be believed. If an item is true and accurate, it cannot simply be removed from your report. A credit bureau must investigate claims within 30 days, but this does not mean that the item is simply removed automatically. Refuse to do business with any credit repair company making this claim and keep looking for honest help.
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.
Technorati Tags: No Tags
Related Tags: No Tags
Possible Related Posts
