Tip #36: Seek free or inexpensive help before
seeking paid credit repair help
If you need credit repair, odds are good that your finances
aren’t in the best possible shape. That likely means that
you should attempt to spend as little as possible on credit
repair - the money you save can be channeled into repaying your
debts. Before seeking credit repair services, follow the
tips in this ebook in order to repair your own
credit.
Also, seek out free or inexpensive sources of credit repair
help. Some non-profit credit counseling services are
actually registered charities and will work on your
behalf. If you can get help from one of these companies
or undertake credit repair yourself, you will be able to save
money quite easily.
In addition, these companies tend to be more legitimate than
credit repair companies that take your money, anyway.
Tip # 37: It will be easier for financial
experts to help you if you seek credit repair help sooner
rather than later
If you do decide to seek credit repair help from the
experts, it makes sense to seek that help before your financial
situation spirals too far out of control. After all,
credit repair experts can do little for you if your credit and
financial situation is so bad that the only option left to you
is bankruptcy.
Tip #38: Look out for credit repair
scams
There are a number of credit repair scams out there.
These scams often promise to help free you of bad credit, when
in reality the “experts” offering these services will either
overcharge you, involve you in illegal activity, or actually
put you in a worse financial situation. Look out for
these most common scams:
1) Credit repair companies that tell you to lie on loan
applications or suggest that you develop a second
identity. This is illegal and dishonest. If a company
suggests that you open accounts in a new name or falsify your
information on loan applications, run, don’t walk,
away.
You can be charged with fraud for doing this - and you will
be held responsible for your actions, even if you were acting
under the company’s advisement. You certainly don’t want
to add legal troubles to your credit woes.
2) Credit repair companies that charge you fees or hidden
fees for things you could do for free yourself - such as work
out a budget. Also be wary of companies that ask for money
up front.
3) Credit repair companies that promise to pay your
creditors from money you pay to them and which they keep in an
escrow account. This is a common scam and it presents a
huge problem for the debtor.
Here’s how it works: the debtor gives money to the credit
repair company, presumably for paying off debts. The
company places the money in an escrow account where it
grows. The idea is that the company will eventually pay
off your debts when the amount reached in the account matches
the debts. The problem is that in the meantime, the
credit repair company is removing some money from the account
for administrative fees while creditors are becoming more and
more anxious, increasing the interest on the debts and even
starting legal action against the debtor. This type of
“credit help” can actually ruin your credit rating!
4) Credit repair companies that pressure you, don’t listen
to you, or want you to sign a contract you have not read. Such
companies are not to be trusted and should be left well enough
alone.
5) Companies that offer you fast or instant credit repair -
no matter how bad your credit. This is simply a
misleading a claim that no company can legitimately deliver
on. If you have very bad credit, it may take years to
fully repair.
In many cases, these companies will claim that they can
remove your poor credit history from your credit report by
disputing it. This is false information. You simply
cannot remove true and accurate information from your credit
report. It is true that a credit bureau must investigate
a claim of inaccurate information within thirty days, but this
does not mean that the company will automatically remove the
information.
In fact, if the information is accurate, the data will
stand. Credit bureaus are aware of this common credit
repair scheme and have become very good at detecting it.
Many credit repair companies (and even some individuals) will
try to dispute every ding on a credit report, hoping that the
backlog of disputes will cause the credit bureau to
automatically remove the offending items from the report (the
credit bureau is legally required to remove disputed items it
has not investigated within 30 days). This technique is a
scam and is dishonest since you are not disputing inaccurate
information.
Refuse to do business with credit help companies that use
this practice.
6) Companies that don’t tell you your rights or try to take
money for things you could do yourself. You can get
copies of your own credit reports and have the errors on them
fixed for free yourself - a company that does not tell you can
do this yourself ifs taking money form you for things you can
easily do yourself.
It is a dishonest practice, and companies who follow such
business practices should be avoided at all costs.
Also, if a company does not advise you of your credit
rights, then that is an indication that they are not really on
your side in the first place. Why would you want to do
business with a company that does not help you?
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