Tips for avoiding credit repair scams

Tips for avoiding credit repair scams

You are ready for that shiny new car, but you hit a wall after realizing your credit is less than stellar and you are not approved for a car loan quite yet. Just because you want a quick fix, you have to make sure you stay away from credit repair scams, which can be pretty easy to fall victim to if you are not informed.

Signs you are being scammed
There are a number of ways to determine if your credit repair organization is legitimate. For instance you should be given a copy of the "Consumer Credit File Rights Under State and Federal Law" detailing your right to get a credit report and dispute any credit report information is that is false – if you don't get this document, you can question the organization's credibility.

Also, you should be given the contract before you are asked to sign anything, the payment should not come before the services, and a company should never ask a person to create a "new" identity with their own social security number. Stay away if the company promises to remove any accurate, but negative, information on your report or requests that you sign a form waiving your rights under the Credit Repair Organizations Act.

In addition, you can detect if you are dealing with a scammer if certain things are not included in the contract. This includes if the amount you are being charged isn't included as well as details about the services the credit repair organizations is doing for you. If the name, business address or the date when everything will be completed are not listed in the contract, a few more red flags should pop up.

What to do if you realize too late
If you realize after the fact that you were scammed, you should make a complaint – these fake organizations should not get away with it. You can first contact your state attorney general. You then can send a complaint to the Federal Trade Commission and the Better Business Bureau. These are also good places to do research before you use a credit repair service to make sure it is not a scam – once you are certain the business is legitimate and trustworthy you are one step closer to getting that new car. 

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