Uneven Repair

How to avoid credit repair scams

You know how important a good credit score is, which means if you’ve ever had a poor one — generally considered anything from the mid-500s to the low 600s — there’s a chance you’ve considered using a credit repair company. However, not all of these companies are created equal. Some are outright scams. Here are a few tips to help you avoid falling into predatory hands.

Write It Up

One of the biggest red flags when using a credit repair company is if it fails to produce a written contract. Any legitimate company will work out the details with you and then send you a copy of the contract in the mail. If the company delays or avoids a written contract, move on.

Nothing New

Some companies will offer you a “new credit identity” for the right price. Sound enticing? Well, it’s a scam. As the FTC notes, these companies claim that they can help hide your poor credit info by giving you a number similar to a Social Security number. Sometimes it will be an Employer Identification Number, which is legit, but not acceptable as a replacement for your Social Security number. Don’t believe any credit repair company that promises you can start over again as someone new.

Pay and Sit Back

Any credit repair company that asks you to refrain from contacting credit reporting agencies directly is likely a scam. Likewise, if the company asks for payment upfront — before doing any actual work — you should take your business elsewhere.

Chris O'Shea

Chris O'Shea