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Use Extreme Caution When Choosing a Credit Repair Company

By plrprousers | December 31, 2008

Be careful and watch for credit repair scams. These offers always state that they assist with bad credit, when in reality, far too often, they will overcharge you, cause you to do something illegal, or get you into a worse situation financially. Educate yourself on the more common of these.

1) Credit companies wanting you to be less than 100% truthful on a loan application or suggesting that another identity would be a good idea. In addition to being dishonest, it is not legal. If a credit repair company suggests that you apply for credit with a different name or put false information on a loan application, you will know to keep your distance.

You could be charged with fraud if you allow this to happen, and it will be your responsibility for these actions, even if it was at the suggestion of the credit repair company. The only thing worse than sorting out your credit problems would be to add legal problems as well.

1) Credit repair companies that charge fees to do relatively simple tasks that really would be best for you to do yourself – such as preparing a budget. Also, you should be concerned if the company asks for money up front.

There is an abundance of great information online for anyone wanting to eliminate credit card debt and repair their credit. Do this before you pay someone else for much of the same information.

1) Credit repair companies that take money from you for the purpose of paying your creditors, but keep that money in an escrow account. Although common, this is a scam that turns out to be a huge problem for unsuspecting debtors.

Here’s how it works: you give money to the repair company who is supposed to use it to pay off debts. The company places the funds in escrow where is grows. The notion is that the company is to use the money to settle your debts once the account grows to the same amount as your debts. You can get scammed if the company starts paying themselves all sorts of administrative fees, but not taking card of your creditors so that they start increasing your interest charges and possibly starting legal action against you. As a result, what should have been a helpful service turns out to be a scam that could ruin your credit rating.

1) Credit repair companies that try to pressure you, make you feel your comments and concerns are not important, or want you to sign a detailed contract without making sure you understand it thoroughly. This type of company is not to be trusted; leave well enough alone and try another company until you find one you can trust.

5) Credit repair companies that claim to provide instant credit repair, despite how bad your credit currently is. No credit repair company can legitimately deliver on this type of misleading claim. As a matter of fact, fully repairing a bad credit history can sometimes take years no matter what the company claims. It is generally best to focus you attention mostly on how to eliminate credit card debt, knowing that your credit history will improve over time as a result.

In many cases, credit repair companies will suggest that they can remove items reflecting poor credit from your credit history through a process of disputes. This is false information. True and accurate information cannot simply be removed from your credit report. Even though a credit bureau must investigate claims of inaccuracies within thirty days, this by no means suggests that the claim will somehow automatically be removed. Just refuse to do business with any credit repair company that makes this false claim.

Hopefully, these tips will help you avoid credit repair scams and allow you to properly locate companies that can truly help you with your credit card debt elimination plans.

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