Have You Been Scammed By A Credit Repair Company?

As promised on an earlier blog, let's talk about credit repair scamms. Of course scamms are illegal but none the less they exist.

We have already established the fact that derrogatory credit can not be removed from a credit report if it is reported correctly and if not enough time has elapsed since the recording. That would be around 7 years for the majority of the derrogatory credit and 10 years for bankruptcies.

We have also established that the credit repair companies claiming to clean up bad credit within 3 months, six months, one year, etc. is advertising misleading information.

Well then why are these advertising gimmicks still employed and why is nothing done to stop them.

Every day you can find advertising trying to fool consumers that have poor credit histories. First and foremost, the public has got to be aware that the poor credit can not be cleaned up. No matter how much money is paid for the service and it does not matter what company is employed.

Here are a few warning signs offered by the Federal Trade Commission. (FTC)

• The credit repair company wants payment up front before they take your case.The credit repair company recommends that you do not contact any of the credit bureaus directly, but leave it all in their hands. 
• The credit repair company does not review with the client, the legal rights of the client.The credit repair company does not inform the client that he or she can accomplish what can be accomplished on their own for free. 
• The credit repair company advises the client to invent a new credit identity by applying for and EIN number, Employment Identification Number to use instead of a social security number.
• The credit repair company advises for the client to dispute all derrogatory credit whether reported correctly or not. 

The majority of this advise or methods to clean your credit is illegal. The client maybe committing fraud by employing these methods.

Another thing to remember is that if a person applies for a credit by telephone, mail or internet and knowingly enters false information, they may be guilty of a crime. This would be mail or wire fraud.

So you see, not only would these scammers be taking a persons money, but may potentially expose the person to an illegal action.

Take note, the following is good information to have.

• It is illegal to lie on any loan or credit application.
• It is illegal to intentionally misrepresent your social security number.
• It is illegal to obtain a EIN number from the IRS under false pretenses.

Any and everything a credit repair company can do for you, you can do for yourself at little to no cost.

The best advise to be given in this article is that if you are not sure, contact a credit counseling agency. They can give you more detailed information and you will not run the risk of paying for a service that can not be given to you by a company that can not legally give you service.

A person's credit report is one of the most important tools consumers can use to maintain their financial security and credit rating, but for so long many did not know how to obtain one, or what to do with the information it provided. -Ruben Hinojosa