DCWP - Credit Repair Scams (2024)

FAQs

What are common credit repair scams? ›

Legitimate credit repair companies can help you remove inaccurate information from your credit report, which may be damaging your credit score. However, they can't do anything for you that you couldn't do on your own—and for free. In addition, there are some disreputable credit repair companies that you should avoid.

It promises to remove negative information from your credit report. FACT: No one can legally remove negative information from a credit report that is accurate. Most negative information generally stays on your report for seven years while bankruptcy information can remain on the report for ten years.

Credit Saint is one of the most aggressive companies that has offered credit repair for more than 15 years. Because they're confident in their great service, they can offer you a 90-day money-back guarantee.

If your credit report shows a history of debt problems or contains errors, you may consider using a repair service to “clean it up.” Before you pay, however, know the way these businesses operate. In the vast majority of cases, hiring an outside company will do no more than waste your money.

Credit repair can cost around $100 a month and take several months — with no guarantee that your credit score will be higher at the end. Note that credit repair can't do anything that you can't do on your own, and it can't remove negative marks from your credit reports if they're accurate, timely and verifiable.

To remove an item from your credit report, you can dispute it with the credit bureaus, providing evidence if necessary, and follow up until it's resolved. Alternatively, you may negotiate with the creditor directly to settle the debt in exchange for its removal from your report.

But while credit repair services may promise simple remedies, they come with significant risks. More than 50% of all credit repair complaints submitted to the Consumer Financial Protection Bureau (CFPB) in 2023 involved fraud and scams [*].

To understand what legal credit repair is, you need to understand illegal credit repair. Illegal: Altering your social security to improve your credit rating. Report to the authorities any credit repair company that encourages you to change your social security number or acquire a new security number under your name.

How can I avoid becoming a victim of credit repair scams? ›

The safest option is to avoid paying for credit repair altogether. Remember, there's nothing a credit repair company can do that you can't do on your own. The Fair Credit Reporting Act (FCRA) is a federal law that gives you the right to dispute inaccurate or incomplete information on your credit report for free.

Consumer credit card scams involve fraudulent or unauthorized activities aimed at gaining access to your credit card information, usually with the intent of making unauthorized purchases or selling your information to other criminals. Some scammers may also obtain your information to take over your credit card account.

The fees these types of companies may charge are often high. You also can't remove negative information if it's accurate, and you might end up paying for no results.

You can always try to repair your credit yourself; however, depending on your financial situation, working with a reputable credit repair service may save you time and provide a better outcome in the long run.

The first warning sign is when the organization. This is explicitly stated in The "Credit Repair Organization Act" that a written statement must be provided which contains the legal rights for the contract.