Featured News 2012 Avoiding Credit Repair Scams

Avoiding Credit Repair Scams

If you have been struggling with overwhelming debt, it's likely that you have heard the many gimmicks and catch phrases about repairing your credit, getting rid of your bankrupt status, or even removing liens, bad judgments and bad loans from your credit file. How many of these claims are actually true, though? As the Federal Trade Commission (FTC), a government agency dedicated to protecting the rights of consumers, has revealed, many of these statements made by companies promising to rid of your poor credit are actually just scams. In fact, the attorneys at the FTC have reported that they have yet to see a legitimate credit repair program make these claims. The truth of the matter is that repairing credit is a process that takes time, as there is no true "quick-fix" for creditworthiness. This isn't to say, however, that improving your credit over time is impossible.

Before paying a fee to a "credit repair" company, there are several things that you should be aware of to make sure that you are not the victim of a scam. First and foremost, as stated before, there is no quick solution to poor credit; it is simply something that must be earned back over time. If a credit repair company is telling you otherwise, it is very likely that they are promoting a scam and doing something illegal. According to the FTC, if a company is promoting their ability to remove negative credit from your history and actually does so, it is against the law; it is illegal to remove accurate, yet negative information from a credit report.

There are certain tactics that an alleged credit repair company may employ to reel you in, including making false accusations and promises. One of the most common guarantees seen includes the promise of getting rid of any negative credit information even if it is current. Other tactics that these companies use include asking consumers to pay for their services, failing to inform consumers on their rights or the services they can enlist for free, demanding that consumers do not contact a national credit reporting company, or advising consumers to dispute all information that is on the credit report. Additionally, they may ask you, as a consumer, to invent a new identity for yourself by applying for an Employer Identification Number, which they want you to use instead of your Social Security number.

Following these tactics as advised by a credit repair company may not only harm your current credit report, but it may also stamp you with serious criminal charges. That's right – following these actions to wrongfully remove accurate information from your credit report may be considered fraud, a crime that is not taken lightly by the U.S. government. Such actions that may fall under the category of fraud in this sense include lying on a loan or credit application, obtaining an Employer Identification Number from the IRS under false pretenses, or misrepresenting your Social Security number. Additionally, a person can face mail or wire fraud if these transactions are completed via mail, telephone or internet, or bankruptcy fraud if any false information was providing on that petition.

Before trusting the future of your finances to a seemingly honest credit repair company, consider the possibility that this may be a scam. Not only does the government advise against it, but local bankruptcy attorneys will agree with them. There is no overnight solution to credit repair. The only way a debtor can rebuild their credit is over time by keeping up with payments and proving that they can be held financially accountable for their spending. If you are struggling with debt and looking for a solution, only a local bankruptcy attorney will be able to provide you with information on your rights and the free solutions available to you. Contact your local bankruptcy lawyer today to learn more.

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