Credit repair scams
How Can We Diagnose
a Credit Scam?
If
you are looking to fix your impaired credit, then you must have contemplated
using a credit repair service for aid. However, there are many agencies looking
to fraud innocent costumers requiring help with their credit.
In
addition to many companies out there that may have what it takes to help you
repair your credits, there are many institutions that only want to scam you
into giving them money and information for illegal practices.
To
help prevent you from facing this tragedy, we have this guide to aid in
differentiating between legitimate
credit repair companies and credit repair companies.
Signs That Indicate a
Credit Repair Scams.
There are a certain set of rules that credit
repair companies follow. If those rules are violated and the deal sounds better
than it is, then it is clear you are looking in the face of a scam. Following
are the signs that are considered red flags:
1. Assured
Results
According to the Credit
Repair Organization Act (CROA), a credit repair agency cannot promise results. These faulty promises
include:
·
Enhancement
of your credit score
·
Results
in specific time periods
·
Elimination
of all inaccuracies in a credit report
2.
Demand
of an upfront payment
Under
the CROA, a company is not permitted to demand payment before their services
are provided. A lot of the agencies know that many consumers are not aware of
this stipulation and therefore, they are able to benefit from it.
Furthermore,
some credit repair companies prevent the cancellation of a deal without a fee.
Every credit
repair company is obligated to give you three
business days of unpaid cancellations of the contract.
3.
Declares
the requirement of a new identity
Any
agency that offers the creation of a new identity makes certain that it is a scam.
In no circumstance of credit repair is a new identity required. Agencies try to
vow a brand new identity with a new Employer Identification Number (EIN) or a
Credit Privacy Number (CPN).
The
agencies then inform you to utilize these new given numbers for any
credit-related applications rather than using your Social Security Number.
4.
Unclear
explanation of your legal rights
Credit
repair institutions are required to give you a clear explanation of all your
legal rights. Mentioned below are some ways they do so:
·
Informs
you not to communicate with the credit bureaus yourself.
·
Do
not provide you with a duplicate of the contract
before signing.
·
Do
not inform you of the ability of repairing your credit
yourself.
·
Ignorance
of vital information from the contract.
If
it is made clear that they are withholding information from you, then you must
look elsewhere for the service you require.
5.
Asking
you to provide misleading information
An
agency looking to scam you will encourage you to provide misleading information
to any parties involved in the repair of your credit. This includes the use of
an unlawful EIN or a CPN instead of your Social Security Number.
In
addition, they can use these techniques to claim the case of identity
theft when it is untrue.
Common Credit Repair
Scams
Generally,
credit repair companies use the false promise of results as a method to their
scam, but it is important that you know all other ways a company can frame you
and put you at risk.
File Segregation
Schemes
A
file
segregation scheme is the situation in which the company
encourages to give you an Employee
Identification Number (EIN) to utilize for credit applications
rather than using your Social Security Number.
It
is illegal for agencies to encourage this and for customers to use any other
number besides their Social Security Number.
Credit Privacy Number
A
Credit Privacy Number (CPN) is built to use instead your Social Security Number
when appealing for credit, much like the EIN. Basically, these pins are all
numbers that can be used rather than your Social Security Number. Scammers
create them using them some other person’s information and can be regarded
identity theft.
Tradeline Renting
Tradeline
renting is when you issue a payment for an authorized
user status to appear on your credit report and
ultimately benefit your credit score. Instead of repairing the inaccuracies on
your report, it adds a positive spin to the overall report to increase your
score.
Although
it is not illegal, it can cause issues. There is no problem if you are added
are an authorized user in someone’s report, rather an issue if it is bought in
anyway.
What Should I Do If
Scammed?
There
are several things you could do if you find yourself stuck in a spam. Some of
these steps are highlighted below:
·
Report
the agency to your state
attorney general
·
Record
a complaint with the Federal Trade Commission
and the
Better Business Bureau.
·
Seek
help
from your attorney if you decide to take further legal action.
Can Credit Repair
Agencies Repair Your Credit?
A
credit repair company that follows all the rules set in place by the CROA, is a
legal company that can aid you in the repair of your credit. Although the
repair of your credit can be done yourself, a credit repair institution makes
the work much easier for you. Signs that indicate a legal credit repair company
are:
1.
They
customize their repair plan to your situation.
A legitimate credit repair company will review your case thoroughly before
giving you a definite plan and a deadline.
2.
Stay
in constant contact with you through the process.
A legal credit repair agency will stay in touch with you through the process
and will let you know about the happenings of the case.
3.
Clear
your rights from the get-go. The signing of the
contract will include an informative summary of all your rights. Like the
ability to repair your credit yourself, and all the services that will be
provided.
4.
Make
false promises about their services. As it has been made
clear, a company making false promises about what they can do for you is most
likely to be a scam. They can only promise results in a specific time after a
thorough review of your credit report and history.
How can I Safely
Repair Credit?
Making
timely payments and disputing
inaccurate information on your reports is how you are
able to fix your credit. Using a credit repair agency like the Blackwater Credit
Repair will ensure an easy process.
Blackwater
Credit Repair has employed the best services and remains under the stipulations
of the CROA to ensure that our customers receive the finest experience with
credit repair. Contact us for help or for a free
personalized credit report consultation.