Falling for credit repair scams can be emotionally devastating and wind up costing you a lot of money.  Your credit score determines how much you pay for things like insurance and mortgages and affects your ability to get approved for a loan.  If you have found yourself in a situation where your credit score is less than desirable, there are many companies out there that can help you to rebuild your credit score.  While there are many legitimate companies that can help you to rebuild your credit score, there are also many companies out there that are scams and prey on those who are vulnerable.  These are the four steps to take to avoid credit repair scams.

Step 1:

Look for Companies That Don’t Make Outrageous Claims

If a company is claiming to easily erase anything negative on your credit report and that they can restore your credit without a problem then proceed with caution.  Negative information cannot simply be erased unless it is not valid or accurate.  If it is accurate, then it has to stay on your credit report for a predetermined amount of time.  A company that tells you they can simply erase anything negative from your credit report should not be trusted and you should stay away from them to avoid falling for a credit repair scam.

Step 2:

Look for a Company that Educates their Clients

Legitimate credit repair companies should aim to educate their clients in the process of credit repairing and be able to inform you as to why your credit was damaged in the first place.  It is possible to repair your credit on your own, the credit repair companies are just in place to help guide you through the process and make it easier to succeed.  If a company tells you not to contact the major credit reporting companies directly or tells you that you will be unable to repair your credit on your own, then you should avoid them as they are most likely a scam.

Step 3:

Look for Credit Repair Companies that do not make you pay up-front

Legitimate credit repair companies will wait until after their services have been performed before they accept any payment.  Companies that request payment up-front before they have performed the services that you are requesting are most likely a scam.

Step 4:

Look for credit repair companies that encourage you to work on improving your credit score rather than attempting to change your credit Identity

Some illegitimate credit repair companies try to convince their clients to create a new credit identity by applying for an employer Identification number to use for their credit report instead of their Social Security Number.  Doing this can be considered fraud and any company that encourages the use of this is most likely a scam and should be avoided at all costs.

If you find yourself needing to repair your credit score and do not want to fall for a credit report scam then it is best to be familiar with your rights and know exactly what your credit score is and what the factors are that are lowering your credit score.  It is also important to seek out the advice of a professional who is well versed and knowledgeable in FTC guidelines to help you navigate the credit repair process.  There are many organizations that will offer credit repair counseling for free or little charge and there are also many organizations that will offer in-person credit counseling to those who need it.

It is probably not true if it sounds untrue initially. Credit repair always proves the rule of thumb to be true. On most occasions the promises made by credit repair companies towards reducing your debt burden turn entirely false. Prior to repairing your credit, you might need to do one or more of the following things:

Obtain a new identity

A few of the companies might try to persuade you to create a different identity; they would try to establish that by creating a new identity you’ll be able to remove all of your bad credit history. You must know that it is not possible for you to create a duplicate identity; you’ll move against the law if you try to obtain a new social security number in your name.

Submitting wrong information

Stay away from options like submitting wrongful information regarding your purchases; a good company should only ask you to improve your bad history. Some companies would ask you to do it so that your information can be disputed and a few bad histories can be rectified to reflect a better look of your credit report. Remember, in doing so you’ll actually be committing fraud although it might sound good.

Paying for your credit report

Under a few conditions, you might be able to obtain a credit report without bearing any charges towards your credit repair company. Once your credit card application gets denied, it will take you some 60 days to obtain your credit report for free. While checking your report if your eyes meet with a mistake, then you may get it disputed with the information provider and the credit reporting agency.

No bad history on your credit report can actually be removed by any agency or individual. You may rectify any wrong information that you come across in your report without any charge; credit repair companies know the process better and can help speed up the process. At the same time, you’ll need to beware of companies that request you to pay a stipulated amount for working on your behalf and then vanish into the thin air without resolving your issue.