If you have a bad credit rating, you might find it extremely difficult to secure a loan or a mortgage. In cases like this, a credit repairing company might sound like a perfect choice to get you back on track.
Don’t get us wrong! Going to a credit repair company is a very smart way to improve your credit rating. But only if you’re smart enough to identify a legitimate, reputable company rather than falling prey to scammers.
Here are a few pointers that’ll help you to identify credit repair scams and remain cautious.
Creating a New Credit Identity
There are many scam companies that promise to create a new credit identity for customers in order to conceal their prior credit history—which may contain bankruptcy, foreclosure, or other delinquencies.
Upon payment, these companies provide you with a credit privacy number (CPN), comprising 9-digits that resemble your Social Security Number (SSN). In some cases, they’ll ask you to apply for an Employer Identification Number (EIN).
The scamming company will then ask you to apply for credit using the provided CPN or the new EIN instead of the SSN, and put you under the impression that the process is legal. However, that’s not the case. In fact, this constitutes identity theft, which is a federal crime.
Filing a False Identity Theft Report
Identify theft is a major problem; millions of families suffer each year in the United States due to the falsification of identity. Fortunately, the Fair Credit Reporting Act (FCRA) enables you to remove these accounts from your credit reports as long as you properly report the fraud.
You probably have an idea of where this is going. Scammers encourage you to falsely claim to be a victim of identity theft to wipe out adverse charges from your report. They might even facilitate you in filing for a fake identity by counterfeiting police reports.
However, if you go along with this arrangement, you’ll be in breach of multiple laws and likely be subjected to hefty fines and possibly some jail time as well.
Promising Unrealistic and Overnight Results
As per the policies set out by the Credit Repair Organization Act (CROA), it’s illegal for a credit repair company to make false promises to their clients about the services that they offer. In fact, they’re obliged to state your rights in a written contract.
Moreover, they’ll have to provide the details of the services that you can expect them to perform, the expected time it would take to get results, and the total costs that you’ll incur, among other necessary details.
There are scammers who promise overnight results and quick improvement in credit ratings; which clearly shows that they’re likely to persuade you to use unethical or illegal method to improve your credit ratings, which do more harm than good.
So what’s the solution?
If you’re looking to improve your credit rating, it’s extremely important to understand these scams and never be lured by too-good-to-be-true schemes, as it can have serious legal repercussions.
Instead, you should opt for the services of a reputable company that can analyze your current credit rating and help you rebuild it using ethical and legal routes. You can even ask the credit repair company these questions to verify their credibility.
If you’re looking for a credit repair consultant who can provide you with an ethical and legal customized solution to help you build a stronger credit rating, contact Master Credit Consultants.
Based in Spartanburg, South Carolina, we’re an established consulting firm that offers credit restoration services; helping our clients to achieve their credit goals and maintain healthy credit ratings for a long-term period.
To schedule a free consultation, give us a call at 1-844-620-8796 or visit our website for more information.