Debt overwhelms consumers for all types of reasons such as unexpected bills, medical costs, job loss, loss of a wage earner or mortgage payments on an underwater home. When debt becomes too much to manage, offers of assistance by credit repair companies can seem like a much-needed solution. However, many companies take advantage of desperate consumers through credit repair scams.
Warning signs of scams
If you are looking for a credit repair company, make sure to watch out for signs of potential scams:
- Companies making promises too good to be true, such as erasing bad credit information, even if it is accurate
- Quick-fix companies, which charge high fees to fix credit, but ultimately do nothing to repair credit
- Companies that ask for large sums of money in advance of providing service, even when there is a money-back guarantee
- Companies with pay-per-call or 900 number services advertising guaranteed credit or cash loans
- “Gold or platinum” credit cards that promise to help consumers build credit even when their credit history is poor
- Agencies advertising easy credit approval or low credit card interest rates that ask for checking account numbers or credit card numbers as part of an approval process
Avoiding credit repair scams
It is important to repair your credit as soon as you can. Consumers facing debt or attempting to recover from bankruptcy can take certain steps to avoid scams and safely start on the road to debt recovery. For example, you should research credit repair agencies by contacting the office of the state Attorney General to see if the company is facing a lawsuit, as well as the Better Business Bureau and local consumer affairs agency for reviews of the company. One of the best ways consumers and businesses can protect their interests and avoid debt scams is to rely on reputable bankruptcy attorneys for guidance through legitimate options, including bankruptcy, debt settlement and disputing incorrect credit information.