Credit Repair Companies
The Worst Scams And How To Avoid Them!

Credit Repair Companies claims to offer a free legal credit repair letter or special credit card debt software or the latest how to repair credit yourself special report guide.

These repair companies promise to fix your credit often for an exorbitant fee that can run into thousands of dollars. Remember, a company cannot do anything more than you can do yourself through patience, persistence and knowledge. And you can do it for far less than it will cost with a repair company.

Also be wary if the company claims it can get you a major bank card even if you have poor or no prior fico history.

Companies use many techniques to draw clients: from court reported bankruptcies and telemarketing to direct mail advertising. Once they contact you, they often prey upon your fears with these lies and deceptions: They may claim the company is affiliated with the federal government.

In truth, beyond passing laws to protect consumers from unfair creditor practices, the federal government is in no way connected with any aspect of scams.

They may tell you that file segregation is a legal credit repair technique. But file segregation is an illegal technique used by some companies to create a separate identity for a client.

This is a federal crime that may also involve mail order scams or wire fraud. You may also be sued for civil fraud.

The mis-representations by repair companies are designed to panic you into seeking their help. The more desperate you view your situation, the more you will believe their extravagant claims.

They may also trade on your fear that bankruptcy destroys your ability to obtain a loan for ten years. This also is part of the scam. Most creditors consider bankruptcy case by case, and take into account the reason for the bankruptcy, and whether it was due to circumstances beyond your control, such as illness or job loss.

Some states have laws that regulate credit repair companies.

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These states usually require companies to be bonded (or have insurance to cover up-front deposits in case they are sued by clients), abide by the FCRA, inform clients of their legal rights, provide clients with a written contract and allow clients 3 to 5 days to change their mind after they sign a contract.

Fifteen states that regulate loan companies are: Arkansas, Louisiana, Oklahoma, California, Maryland, Texas, Connecticut, Massachusetts, Utah, Florida, Nevada, Virginia, Georgia, New York and Washington.

Disguised as a debt consolidation company, a company also may offer you a very high interest loan with large up-front fees, possibly secured with your home as collateral.

Also disguised as a debt counseling service may be a bankruptcy attorney using the service as a front to attract clients. Another firm may offer you a national bank card which is only a secured bank card easily obtained yourself without having to pay an additional fee to the firm.

Bogus companies often disguise themselves as:

  • credit history repair services
  • legal debt elimination companies
  • credit repair firms
  • consumer counseling service
  • best debt settlement companies
  • fico score repair companies
Look for certain warning signs when you investigate one of these companies.

These scams include such impossible claims and false promises in the company’s advertising, as no credit beyond repair, eliminate all negative reporting including bankruptcies, or We can get you unlimited credit now, no matter how poor your history.

You can visit the Better Business Bureau's website and find reports on hundreds of companies.

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