If your credit score is low and it’s preventing you from obtaining a mortgage, taking out an auto loan, or making it hard for you to rent an apartment, there are reputable credit counseling agencies that can help you improve your low credit score.
Unfortunately, there are also dozens of unethical businesses that prey on unwary people by offering to fix their credit history. Here’s how to spot credit repair scams and how to get legal help if you were scammed by a fraudulent credit repair agency.
What Can a Credit Repair Agency Do?
Credit repair is sometimes misinterpreted to include any service that will raise your credit score. However, this is a misnomer and credit repair agencies cannot actually help you bring your score up. They can only assist clients in having incorrect negative information deleted from their credit reports. This in turn helps improve a person’s credit score over time, along with good credit practices.
Top Red Flags to Watch Out For
The company makes promises that sound almost too good to be true.
If a credit repair agency makes promises about improving your credit score that sound too good to be true, it most likely is. You might hear an agency promise to boost your credit score by a certain number of points in just a few weeks, or they may say they can get your debt eliminated. The reality is that improving your credit score is a long, difficult, and organic process that takes effort over time.
The company guarantees they will be able to get certain results.
If a credit repair agency says they will be able to lower your score by a percentage or a specific number of points, this likely indicates the company is fradulent. It’s not possible to know how in advance how resolving items on your credit report will impact your score ahead of time.
You are required to make payment first.
Never make a payment to a credit repair agency in advance of them completing any work on your behalf. If the agency says they cannot access your credit reports or take any steps to repair your credit without a payment first, know that this is false and a red flag that a bogus credit repair company is likely trying to scam you out of money.
You’re encouraged to dispute everything.
Some unscrupulous credit repair companies will try to get items removed from your credit report simply by overwhelming the system. They’ll often see what they can get dropped from your report just by making someone locate the paper trail for each item, because if they can’t, the disputed item must be dropped. These bogus disputes usually don’t end up getting many items dropped though, but they do cost you plenty of time and money.
You’re asked not to contact the credit reporting agencies yourself.
Be wary of any credit reporting agency that requests you do not contact the credit bureaus on your own. You have the right to speak directly with representatives of any of the three major credit reporting bureaus, and suggestions that you shouldn’t can indicate an agency is fraudulent.
The company cannot clearly and succinctly answer your questions.
If you’re considering working with a credit repair agency, make sure you ask lots of questions beforehand, including detailed ones that require more than just a yes or no answer. Gauge how the agency responds to your questions and if the representatives you’re speaking to seem knowledgable enough to answer you. If a credit repair company can’t answer your questions or refuses to, this is a sign to look elsewhere.
Signs of a Legitimate Credit Repair Agency
- The company has a physical address and telephone number you can contact and talk to someone. They respond to your emails or calls in a reasonable timeframe.
- They inform you of your rights as a creditor and their limitations as a credit repair agency. They are transparent and upfront about what they can and cannot do for you, and what rights you do and do not have when getting help with your credit score.
- You are given tools to monitor your own credit and resources on how to use credit wisely in the future.
Scammed? A Consumer Protection Attorney Can Help
Mazow | McCullough, PC are veteran New Hampshire and Massachusetts consumer protection attorneys that work to fight for the rights of the average person. If you were the victim of a credit repair scam, don’t wait to contact us with your questions. We’re available now to help you by calling (978) 744-8000 or toll-free at (855) 693-9084.