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101 Powerful Tips for
Legally
Improving Your Credit Score
Dealing With Professional
Credit Help
Page 2 of 2
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?
Tip #38: Get a good team
on your side to help you with your credit score
A good team of professionals
can help you get your credit score back in shape. Your most
important member of your team is yourself - you are the one with
the financial agency and (with this ebook) the knowledge to
become your own best advocate in credit repair. Besides this,
you may want to check with your local library for financial help
books. You may also want to include financial experts such as
credit counselors or others to help you. If you decide to seek
a team of experts to help, be sure that you check each person’s
credential, standing with the Better Business Bureau, and past
clients to make sure that the person or company can really help
you. Beyond this, make sure that you sign a contract or
agreement with each professional member of your team.
Tip #39: Your bank has
good and reliable credit information
One free and professional
source of credit information is your bank. Your banking officer
may be able to offer you a great deal of professional, free
advice, especially as banks are trying harder and harder to
provide good personal services to customers.
Your bank may also have a
number of credit solutions - such as overdraft protection - that
can help you keep your credit in good repair. Banks are
realizing more and more that many of their clients are dealing
with less than ideal credit. Banks are trying to meet the
demands of this new group and can actually be a powerful ally
for those who are trying to improve their credit..
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