When your credit score is less than perfect, it can feel like the end of the world. You may be tempted to try anything in order to improve your rating and get back into good graces with lenders. But before you sign up for a credit repair program, it’s important to make sure that you’re not about to fall victim to a scam.
There are many different types of credit repair scams out there, and it can be difficult to tell them apart from legitimate programs. However, there are some red flags you can look out for in order to protect yourself from harassment. Here are four tips for avoiding a credit repair scam.
1 – Credit Repair Scams are Rampant in Media
Credit repair scams are everywhere. You may have seen ads for credit repair programs on TV, or you may have been approached by a company offering to help you fix your credit score. However, before you sign up for any program, it’s important to do your research and make sure that you’re not about to get scammed.
Credit repair scams are often too good to be true. If a company promises to fix your credit score in a short amount of time, or if they charge fees that seem to be too low for what you’re getting, these are often signs that the company is running a scam. A reputable credit repair company will never promise or guarantee specific results. They should also not attempt to collect money from you before offering an initial consultation on the services they offer.
If someone promises you results in return for your money, it’s probably best to avoid that person. In the world of credit repair, less is more.
They’re Especially Common on Facebook and Craigslist!
Many people have been scammed over social media networks such as Facebook or Craigslist. A common scam on these sites involves a company offering a “free credit score” to anyone who fills out a survey on a 3rd party website. In reality, the credit score is anything but free. The first thing these companies do upon receipt of a completed survey is send your information to a for-profit company that will then begin soliciting you for paid services that often cost more than those offered by reputable businesses like.
2 – Understanding The Different Types of Credit Repair Scams
There are many different types of credit repair scams, and it’s important to be aware of them all. Some of the most common scams include:
1. The “credit repair kit” scam: This scam involves selling a consumer a “kit” that is supposed to help them fix their credit. However, the kit usually just contains a lot of useless information, and the consumer is never able to actually fix their credit.
2. The “credit counseling” scam: This scam involves contacting a consumer and offering to help them fix their credit. However, the “counselor” often just takes the consumer’s money and does nothing to help them improve their credit score.
3. The “credit file deletion guarantee”. There’s no way to guarantee a deletion because each credit profile is different. Until your case is examined for any false or inaccurate information and submitted to the credit bureaus, there’s no way to know if information will get deleted or not.
3 – Knowing When a Credit Repair Company is Not Legitimate
When looking for a credit repair company, be sure to watch out for the following red flags:
1. The company asks you to pay upfront before they provide any services.
2. The company suggests you file for a new social security number.
3. The company asks you to pay before signing a contract or completing services.
4. The company does not provide references or contact information.
5. The company does not have a physical address or business phone number.
4 – Signs of a Legitimate Credit Repair Company
When looking for a credit repair company, it’s important to be aware of the signs of a legitimate business. A legitimate company will:
1. Have a physical address and business phone number.
2. Provide references and contact information.
3. Sign a contract before providing services.
4. Not ask you to pay upfront before providing services.
Credit repair scams are unfortunately all too common. However, by being aware of the different types of scams and knowing what to look for, you can protect yourself from becoming a victim. For more information on what you need to be on the lookout for, check out this full webinar on YouTube.
Be sure to only work with legitimate credit repair companies, and always read the contract before signing anything. With these precautions in place, you can feel confident that your credit score is in good hands!