7 Ways To Spot A Credit Repair Scam

So you’ve decided to buckle up and set to repairing your credit. You’re looking forward to the easier life that comes with having a good credit score. You’re ready to dedicate yourself to wiping your credit report free of past mistakes and misinformation.

But don’t let your eagerness blind you to so-called credit repair companies looking to take you for a ride. Some credit repair companies, instead of legitimately helping people fix their credit, are outright scams.

Credit repair organizations are governed by a law known as the Credit Repair Organizations Act (CROA), which requires credit repair services to fulfill certain obligations to their clients. You should avoid any credit repair service that doesn’t follow the rules set out in this federal law.

The Seven Signs Of A Credit Repair Scam

  1. You aren’t given a copy of the “Consumer Credit File Rights Under State and Federal Law”, which lets you know your rights to obtain a credit report and dispute inaccurate credit report information.
  2. You aren’t given a copy of the contract before you’re asked to sign it.
  3. The contract is missing the following information:
    • How much you are being charged
    • Details about the services being performed on your behalf
    • A timeline for the credit repair service, with dates and estimated time required
    • The name and business address of the organization
    • A statement letting you know you can cancel the contract within three days
  4. You’re asked for payment before the services have been performed.
  5. The company promises to remove accurate information from your credit report.
  6. The company promises to create or asks you to create, a “new” identity with a new social security number or federal employer identification number (EIN).
  7. You’re asked to sign a form waiving your rights under the CROA.

Featured Image: Thinkstock/BrianAJackson

Posted on May 18, 2023