Credit Repair Services and Scams

If there is information on your credit report that’s negative but correct, you might be tempted by companies claiming they have an easy fix. Don’t believe them! You may end up being charged hundreds of dollars in illegal upfront fees, lose control of your private information, and do further harm to your credit score.

Credit repair services promoted on websites and social media sometimes claim they can permanently remove all negative information from your credit reports and improve your credit score. They say they can create a new credit identity, or hide your bad credit history. But they do this by using stolen Social Security numbers or convincing you to apply for Employer Identification Numbers (EINs) from the IRS under false pretenses – which could result in fines or even prison time. In a best case scenario, a credit repair scammer’s “solution” is simply to provide you with letter templates you can send to credit reporting agencies asking to remove the information.

Real credit repair companies can’t legally remove information from your credit report that’s current and correct. The Federal Trade Commission offers letter templates online for free, but those will only help you remove a legitimate mistake on your credit report. Lastly, credit repair companies cannot charge you before providing a service.

Avoid any credit repair company that:

· Asks you to pay up front.

· Warns you not to contact the credit bureaus directly.

· Advises you to dispute credit report information that you know is accurate.

· Tells you to lie on your credit or loan applications, or file a false identity theft report.

Credit repair companies must explain your legal rights in a written contract that details the services they perform, the cost you’ll pay, any results they guarantee, how long it will take to get them, and your three-day right to cancel. Anything a credit repair company can do legally, you can often do yourself for little or no cost.