How to Spot Credit Repair Scams

Reputable credit repair companies have what it takes to help you dispute various errors on your credit reports. However, with many companies out there, it’s easy to get duped by scammers masquerading to be legit credit repair companies.

What is Credit Repair?

Many people limit the term “credit repair” to imply a service that helps fix a bad credit score. However, credit repair services are not limited to that. Over 50 percent of the consumer or credit reporting complaints sent to the Consumer Financial Protection Bureau in 2017 included errors that people spotted on their credit reports. Any negative item on your credit report can damage your credit score. This is why it’s important that you identify and deal with inaccurate information as fast as you possibly can.
Credit repair services are known to help you remove negative or inaccurate items from your credit reports. The providers of credit repair in Houston and other places charge fees for the services they offer, including disputing errors with major credit bureaus, contacting your creditors. While you can still dispute the errors on your own, credit repair companies know their way around the process, and will obviously take a shorter time to get it done. If you suspect your credit reports are inaccurate and need the eye of a credit repair expert, you can find trustworthy companies online, but most importantly, you need to know how to spot and avoid the fake ones.
Scammers understand that individuals with bad credit may feel desperate and want to get someone to fix it. That’s why they take advantage of such desperation by providing fake services that will put you in a morass.

Warning Signs of Credit Repair Scams

Here is how to know whether a credit repair service is legit or not.

1. Their offer sounds exaggerated

Credit repair services typically help to dispute negative items from your credit reports, which ultimately leads to the removal of such items. However, if they may hyped guarantees to remove all negative items from your credit report or promise to offer a host of many other services, it’s possibly a scam.

2. They guarantee overnight results

For the most part, credit bureaus take anywhere between 30 and 45 days to investigate your credit reports for disputes, get in touch with the major bureaus and creditors and work towards removing negative items from your account. The process can’t take a seven days, for example.

3. They don’t allow you to cancel

A requirement by the Federal Law is that credit repair firms should let you cancel the agreement within three days after signing it. Therefore, legit credit repair companies will give you room to cancel after three days or longer. In addition, you’ll find a clear refund policy on their website in case you’re not satisfied with their services.

4. The provide a new identity

A common indicator of credit repair scams is that they usually advertise a brand new slate with a Credit Privacy Number (CPN) or an Employer Identification Number (EIN). They’ll ask you to use your CPN or EIN for your future credit applications rather than using your Social Security Number.

5. They don’t inform you of your legal rights

The law requires credit repair services to provide you with a written document containing your legal rights before you sign any agreement with them. Therefore, if you realize a company is in haste to make you sign an agreement and skip this essential part of the deal, then that should be a red flag.

6. Don’t have a physical address

A reputed credit repair organization has a physical location where they repair credit for their customers from, even if it someone’s home. Therefore, if you come across a credit repair company that doesn’t have a physical address on their website or isn’t willing to share the address with you, you should assume they are hiding something from you.

7. Promises to remove accurate information from the credit report

Well, your credit report may contain many items; some inaccurate and others accurate. A reputable credit repair company should help you dispute and eventually remove the negative ones. But, some companies may promise to remove even the accurate items from your report. Such providers may attempt shady tactics such as asking you to claim identity theft in a bid to remove accurate details from your credit report.

8. No contract in place

Federal Law requires credit repair companies to have a contract that their customers can sign. The form should detail the specific credit repair services to be performed, the fees the company will charge for the services, and when the fees should be considered collectible. Additionally, there should be an option that allows for cancellation of contract within three days after you sign it, without any financial obligation. Prior to signing up for a credit repair service, ensure you get all these details in writing.

Are the legitimate credit repair companies?

While some companies exhibit the red flags discussed above, it would be an overstatement to suggest all credit repair companies are scammers. Instead of settling on the first company you see, take your time to shop around for various companies. Approach any firm you come across with scepticism.
 They promise the number of points your credit score will improve with
The company may share success stories with their previous customers, but that doesn’t mean they can accurately estimate the number of points your credit score will gain once you use their services.
 Consultation should precede strategy
A competent company should not tell you about the way they will repair your credit if they don’t know much about your credit history. A reliable credit repair provider will ask for details regarding your credit history and may even want to look at your credit reports before telling you what they’ll do.
 Record of accomplishment
You may choose to write to the bureaus and dispute the information on your own, but most people will prefer to pay an experienced company to handle this for them, and that’s fantastic. But, a good company should be open right off the bat; they should tell you about their methods and what sets them apart from the rest. They should easily talk about the number of customers they have satisfied in the past.

What to do if scammed

Don’t let a fraudulent credit repair company get away with it. If you feel they’ve violated your rights, you should take action. You should begin by reporting the company to the attorney general of your state. Check out the National Association of Attorneys General’s website to know your state’s attorney general. You should also submit a complaint to the Better Business Bureau, the Federal Trade Commission, and the Consumer Financial Protection Bureau.

Contact a legit credit repair company today

Are you looking for a company with a proven track record of success, qualified credit repair specialists that won’t keep you waiting for years to see improved results? Contact Alex Miller Credit Repair experts now for a free consultation at 877-503-9737 or shoot us an email at alex@alexmillercreditrepair.com.