Watch Out For Credit Repair Posers
The best way to repair your credit is to do it yourself. There are plenty of advertisements promising to solve your credit problems. In fact, many go so far to actually guarantee to legally fix bad credit reports. These ads are written to appeal to people whose credit desperately needs to be repaired. Often they are sucked in by authentic looking testimonials that are, more often than not, complete fabrications.
If you are struggling with a poor credit history and desperately need relief, it is essential that you immediately take action. However, you must take the steps yourself rather than handing it over to a third party. You don’t have to be vulnerable to credit repair scams. There are things you can do yourself and steps you can take to protect yourself.
The Fraudulence
Day after day, several companies appeal to consumers who have awful credit histories. Often, they promise to tidy up credit reports, for a price, to help consumers loan a car, mortgage a home, or even get a job. The horrible fact is they cannot deliver; you should keep this in mind especially if you do not want to worsen your debt. These companies would only take the cost of the services with them and vanish into thin air.
The Signs of a Scam
If you had responded to a credit repair service, there are warning signs that can help you determine an authentic credit repair offer from a fraud. Firstly, be aware of companies that wish for you to pay the cost of the repair before providing any services. In addition, avoid those companies that do not divulge any possible legal rights you are entitled to and what processes you can do yourself without payment.
Some companies advise people to directly contact credit reporting agencies themselves. It is best to avoid businesses that give this advice. In particular, avoid businesses that recommend you apply for a new Employment Identification Number in order to create a new credit identity and credit history. This is fraud and can lead to criminal prosecution. Don’t even be tempted to get involved with companies like this.
Lastly, those that advise you to argue all information included within your credit report or take actions that may seem illegal, i.e. generating a new credit identity, should be avoided.
It is important to understand that if you supply false information when applying for credit by phone or mail, you can be prosecuted for wire or mail fraud. Under Canadian law, lying on your application for credit, lying about your SIN or fraudulently applying for a new SIN from Revenue Canada are all federal crimes. Under the Credit Repair Organization Act, credit repair companies are prohibited from requesting payment from consumers before they have fully delivered on all promised services. In other words, any credit repair company requesting upfront payments is in breach of the law.
Most importantly, you should remember that included within the Credit Repair Organization Act is the rule that credit repair companies should not require you to pay until the services they have promised are complete.
The easiest way to protect yourself from credit repair scams is, of course, to avoid a bad credit report in the first place. You can do this by reviewing your credit report every now and then. Since your ability to take out loans or obtain insurance is influenced by the information in your credit report, staying on top of your credit report is important. It is particularly important to ensure your credit information is correct, up to date and complete before making a loan application. You can also minimize the risks of identity theft, and its dreadful consequences for your life, by periodically checking your credit report.
