Credit Repair Scams - How to Stay Safe

No doubt you've heard many, many stories of people who go to credit repair agencies for assistance to improve their bad credit, only to fall prey to credit repair scams instead. Before you understand what you need to do to protect yourself against such unscrupulous people, you need to understand how they function.

They know that people, who are up to their neck in debt will be desperate enough to believe anything that is told them, in the hope that these fake agencies will really be able to improve their credit score, so they can reclaim their lives. They are often so disheartened by the system, which is downright cruel to people with a poor credit score, that they'll do anything to get it fixed.

Most people who seek out help are close to bankruptcy, or at least contemplating it. These are the people who are most vulnerable to credit repair scams.

Why? Because they want results fast, and are unable to internalize the fact that the process of repairing a credit report takes at least 6 - 12 months. Very often, these people feel that they don't have much time, and unless they take some urgent and drastic steps right now, in the present, it will spell future disaster. Ironically, when they sign up with such unscrupulous agencies instead of getting themselves rid of debt, they will lose whatever little money they still had, since they've made the mistake of chasing a mirage.

Here are the warning signs that point to credit repair scams:

1. They promise the impossible - you will find that these agencies promise they will have all the negative remarks removed from your credit report. They will also guarantee that your score will increase within the next 2-3 months.

They attempt to do this by disputing everything negative in your report. The bureaus may initially remove some or most of the disputed items which they are unable to verify within the required 30 days. In the meantime, it will seem that this fraudulent agency has delivered on its promise.

But if the bureau is later able to verify the negative items, they will be back on your report - plus you will have earned the reputation of being a hustler!

2. They tempt you to bend the rules - they actually break the law with their tactics, such as using other people's identity to increase your overall credit, by offering to give you a new SSN that has no bad credit record, so that you can "start life afresh."

Beware! Such tactics will only land you into more trouble. Besides the fact that it's against the law to take up a "new" SSN, the number could have a police record attached to it, or any such things that will be far worse that having bad debt.

3. They ask for full payment up front - most of the credit repair scams are characterized by the fact that they ask for their fees in full up front. This is understandable, because they will be worried that you will soon discover they cannot really remove bad credit or improve your credit score as fast as they had promised. And at that point, you would understandably be reluctant to pay their fees.

In conclusion, credit repair scams are avoidable. Just remember that no matter how desperate you become, don't ignore the warning signs!