I’m sure you’ve heard lots of stories of people who have sought out credit repair agencies for help to improve their credit report, only to fall prey to credit repair scams. To learn what actions must be taken to avoid being ripped off by such unscrupulous people|these scammers|these crooks}, you must know how they function.

They know that people who are up to their neck in debt are in such desperation as to believe anything that is told them, hoping these fraudulent companies will be able to solve their financial problems, so they can reclaim their lives. They will often be so disheartened by the system, which is downright cruel to people who have problem credit, that they’ll do anything to get relief.

Most of those seeking help are ready to declare bankruptcy. These are the people who are the easiest targets of credit repair scams.

Why? Because they are impatient, and are unaware that the process of repairing a credit report takes at least 6 – 12 months. Very often, they feel that they don’t have much time, and unless they take drastic steps immediately, it will spell future disaster. Ironically, when they sign up with these company’s instead of improving their financial situation, they will find themselves worse off than ever, since they’ve made the mistake of chasing a mirage.

Here are some red flags that alerts you to credit repair scams:

1. They promise miracles – these unscrupulous companies promise they will have every negative account removed from your credit report. They will also guarantee that your score will increase in an astonishingly short time.

They try to make this happen by disputing everything negative in your report. The bureaus may initially remove some or most of the disputed items which they are unable to verify within the required 30 days. In the meantime, it might look as though this fraudulent agency has delivered on its promise.

But if the credit reporting agencies can verify the negative accounts at a future date, they’ll go back on the credit report – plus you will have earned the reputation of being a hustler!

2. They urge you to violate the rules – they will employ illegal tactics, such as using other people’s identity to increase your overall credit, by offering to give you a new SSN, so that you can “start your financial life over.”

Beware! Such tactics can land you in a lot of trouble. Not only is it illegal to take up a “new” SSN, the number could have a police record attached to it, or any such things that will be far worse that having bad debt.

3. You demand full payment up front – these credit repair scams ask you for their fees in full before any services have been rendered. This is understandable, because they know you will find out that that they can’t deliver as quickly as they claimed. And at that point, they won’t get paid.

It’s entirely possible to avoid credit repair scams. Just don’t forget that no matter how desperate your situation, look out for the red flags!

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This entry was posted on Friday, August 28th, 2009 at 9:47 am and is filed under General Interest. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.