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Credit Repair Scams and How to Spot Them

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Years of overspending and lack of a personal financial plan may result in a bad credit score. As a result, you’ll have a harder time borrowing money from lenders like banks. You’re not alone, though. According to credit bureau Experian, a third of Americans have bad credit.

Because bad credit has many detrimental effects on people’s financial capabilities, many seek the help of credit repair companies in Florida. For a small sum, these companies help you dispute errors in your credit reports and leave you with a much better credit score.

While there are some reliable credit repair companies in Miami, FL, there are others who are not quite as upfront and honest. These companies may take advantage of your vulnerability and your desperation to regain good credit standing. Don’t fall victim to a potential scam. Look out for the following signs that the credit repair company you’re working with may be scamming you:

1. The company asks you for an upfront payment

Under the Credit Repair Organizations Act, which governs all legitimate credit repair companies, they cannot charge upfront fees. Before you pay for their services, they must first complete the work they’ve promised you. If they ask for upfront fees, that is a red flag that you might be dealing with scammers.

2. The company promises to remove information from your credit report

The services that credit repair companies offer should only be about disputing inaccurate items on your credit report. If you’re working with a company that says they can help you get rid of negative but otherwise legitimate information from your credit report, it’s a sign that they’re a fraud.

3. The company offers a new credit identity

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Another sign of credit repair scam is when the company promises to help you create a “new credit identity” using a new Social Security number or your federal employee identification number (EIN). This scheme involves providing you with a typical nine-digit Social Security number or what they may call a credit profile number. This is a scam that may mean the company is selling stolen Social Security numbers. By using a stolen number, you become entrenched in identity theft.

4. The company promises fast results

One of the too-good-to-be-true promises that fraudulent credit repair companies make is that they can give you overnight results. But credit bureaus usually take 30 to 45 days to investigate credit report disputes, so it’s highly unlikely that your credit report will improve much quicker than that.

5. The company doesn’t tell you your legal rights

Before signing any agreement with a credit repair company, they must first give you a written statement of your legal rights under federal law. If the company skips this process or seems in a hurry to have you sign an agreement, that’s another red flag.

Work With a Reputable Credit Repair Company

While there are steps you can take towards improving your credit report on your own, you might not have the time or adequate knowledge to make your case with credit bureaus. Your Family Bank can help with this. When you work with us, you will not only enjoy our efficient and legitimate credit repair services but you will also gain a financial consultant you can trust.

For your credit repair needs, send us a message.

Your Family Bank