In the present world more and more people are seeking the help of credit repair companies to overcome their credit problems, but it is not necessary that all the credit repair companies need to be legitimate.
- What are the various credit report scams?
- How identity switch scam takes place?
- How is it possible for you to escape from credit report scam?
If you owe money, have a bank account, a job, or a Social Security number, then you have a credit report. This report gives businesses an idea of how likely you are to repay your loans and meet your financial obligations. If you sign up for a new credit card, for example, the credit card company will check your credit score or credit report to make sure that you tend to pay your bills on time. Based on the information they find, they will decide whether to grant you a card – and at what interest rate.
Many customers today are aware of the importance of credit scores. Unfortunately, Americans are more in debt today than ever before, and as a result more Americans have a hard time repaying their debts and paying their bills on time. With time, this tends to lower their credit scores and leaves many negative marks on their credit reports.
Many customers with bad credit now turn to credit help or credit repair companies. These businesses often offer to help customers get back their good credit rating so that they can enjoy lower interest rates and more manageable debts. Unfortunately, not all these businesses are legitimate. In fact, a small number of them dupe customers into paying money for credit report scams. Customers signed up with such companies pay money and do not end up improving their credit score. In fact, they may end up with worse scores – and even a criminal record.
Are You Falling Prey to These Scams?
Companies offering you instant great credit are offering you unrealistic hopes. Credit takes at least several months to repair, and many customers who have a very bad credit score may need up to a few years to fix their credit rating. Companies with unrealistic promises may offer to improve your credit report through the following scams:
- The removing non-mistakes from your credit report scam
Some companies may tell you that you can get a perfect credit report by reporting a number of errors to the credit bureaus. These companies will likely tell you those credit bureaus must remove errors from credit reports and that by flooding the bureaus with requests for mistakes to be corrected can get you a perfect credit report. This information is misleading. Although credit bureaus do have to remove mistakes from your report, credit bureaus also have a right to disregard frivolous claims. This means that flooding the bureaus with claims that there are errors on your report will not help your credit report. If you have any genuine mistakes on your report, you can ask that they be removed; however you cannot report correct information as mistakes hoping that the offending items will be stricken from your record.
- The identity switch scam
Some companies will suggest that you adopt another identity in order to get a new credit profile and credit report. This is illegal and can result in serious penalties for you. It is also a completely ineffective way to improve your credit rating, as credit bureaus use a number of identifying features – including Social Insurance Numbers and addresses – to verify identity.
- The pay later scam
Some companies will tell you that you can pay off your debts by paying one very small price per month. However, some of these companies take the money from you each month and place it in an account. From this amount, they remove sometimes considerable administration fees. The idea is that once your account has enough money, your lenders will be paid. The problem is that this method ruins your credit rating and costs you a lot of money. The companies you are not paying and who are not getting any money will not only report you as severely behind in your payments, but may actually seek legal action against you.
- The new loan scam
Some companies offer you nothing more than a new loan. It is true that a consolidation loan will help you combine your debts and enjoy lower interest. However, some companies charge you hefty fees for a new loan without even giving you any other options for repairing your credit report.