Everyday, companies across the nation appeal to
consumers with poor credit histories. They promise to clean up your
credit report for a fee, so that you can get a car loan, a home
mortgage, insurance, or even a job - all that you've been dreaming
of, of late. The truth is, they simply can not deliver in spite of
you paying them hundreds or thousands of dollars in fees; these
companies are not able to do anything to improve your credit report
and what these companies do usually is what they are best at -
simply vanish with your money.
Beware of Warning Signs
In case you do decide to respond to a credit
repair offer, be sure to watch out for these tell-tale signs of a
possible scam:
o Companies that recommend that you try to
create a 'new' credit identity - and thereafter, a new credit report
- by applying for an 'employer identification number' to be used
instead of your social security number.
o Companies that suggest that you should ideally
not contact a credit reporting company directly.
o Companies that require you to pay for credit
repair services before they provide any services.
o Companies that do not keep you informed of
your legal rights and what you can do for yourself, for
free.
o Companies that advise you to dispute all
information in your credit report or else encourage you to take any
action that seems illegal, like creating a new credit identity. If
you follow illegal advice and commit fraud, you too may be subject
to prosecution and hence the need to be extremely wary of such
frauds.
You could be charged and prosecuted for
committing mail or wire fraud if you are found to use the mail or
telephone to apply for credit and provide false information. It is
considered to be a federal crime to lie on a loan or credit
application, to obtain an Employer Identification Number from the
Internal Revenue Service using false pretenses, or to misrepresent
your Social Security number in a totally different light.
As per the Credit Repair Organizations Act,
credit repair companies should not request you to pay until they
have completed the services they have
promised.
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