A consumer contacts a credit repair service to fix bad credit or improve credit rating. What one has to understand is that if the debts are legitimately owed, credit repair may not be able to help. Repair services generally negotiate with creditors on behalf of the consumer and help them improve their credit report over a period of time.
There are several such services available in the market and one has to differentiate between a legit service and a scam. There are a few points that need to be kept in mind to avoid hiring a fraud repair service.
- A consumer should not fall for false promises. Some services will lure customers by promising the impossible. They usually tell clients that they can erase any type of bad credit such as bankruptcies, delinquent loans, tax liens, etc. Such promises are false.
- Payment of any kind up front to a repair service is generally not recommended. A payment should be made only after the services have been performed. They generally charge for each item that has been rectified on the credit report.
- Any service that promotes credit card fraud should be avoided. If the service asks you to get an employer identification number instead of your social security number, you should be alerted. Using the EIN in place of the social security number is illegal. Using the EIN to establish a new credit card identity is a federal crime.
- If you come across a credit repair service that makes false promises, you should report it to the Federal Trade Commission. This will ensure that others do not get scammed by this repair service.