How to Spot a Credit Repair Scam
Just because a credit repair company offers unbelievable services doesn’t mean you should automatically trust them. Do your due diligence before signing a contract with any credit repair company to avoid getting scammed. If the company seems too good to be true, there’s probably a reason for it! When considering working with a credit repair company, you should watch out for some signs.
False promises are, unfortunately, all too common in the credit repair industry. The Credit Repair Organizations Act (CROA) explicitly forbids these empty guarantees.
Recommends Disputing the Accurate Negative Items Also
Legitimate credit repair companies will not recommend that you dispute items on your credit report that are accurate and in good standing. If a company is suggesting this, it’s likely a scam.
Instructs You to Create a New Credit Identity
Opening new lines of credit under pretenses is illegal. Companies who suggest this as an option for improving your credit score are likely a scam.
Sells Credit Education Instead of Services
Companies who sell credit repair software or books about how to repair your credit may not necessarily be out for your best interests and could be a scam.
Fails to Provide Written Contracts
A legitimate credit repair company should provide written contracts that detail the services they are providing and how much they will cost. Companies that don’t offer written contracts should be avoided.
Charges Upfront Fees
Legitimate credit repair companies typically only require payment once they have completed the promised services. If a company requires upfront payment, this should be a red flag, as it could be a scam.