Thursday, March 12, 2015

Are Credit Repair Services Scam Artists?

Mar. 12, 2015

Dear Cathy:

I have had bad credit for the past 10 years but I am at the point in my life where I would like to clean up my credit.  I am thinking about using a credit repair service to help me. Are there any reputable agencies out there or are they another scam?  Bad Credit, Oregon

Dear Bad Credit:

The companies that advertise credit repair services appeal to consumers with poor credit histories.  Credit repair scams offer to erase accurate negative information from your credit file so you can qualify for a credit card, auto loan, home mortgage, or a job.

Rebuilding a credit report is not a quick fix situation and takes approximately one to two years.  It generally takes about two years for 30% to 40% of people with bad credit to turn things around.  Don’t fall for the credit-repair scams that promise to fix your credit overnight.

Reestablishing credit by making payments on time after a period of late payments will help to raise your credit score over time.  Making payments on time establishes a good credit standing.  These credit agencies closely monitor how you pay all your bills.  Having a good credit rating is valuable, and it’s something you’ll want to protect.

For many, it’s simply a matter of cutting back on clothes, cable TV, and other leisure items that you don’t necessarily have to have.  It might mean downsizing an automobile and opting for a smaller, less expensive car, or simply making a decision to use public transportation for the immediate future.

Not only can’t they provide you with a clean credit record, but they also may be encouraging you to violate federal law.  So yes these are scam artists who promote these services.  Again only time and effort along with a personal debt repayment plan will improve your credit.

If you follow their advice by lying on a loan or credit application, misrepresenting your Social Security number, or getting an Employer Identification Number from the Internal Revenue Service under false pretenses, you will be committing fraud.

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