How to Avoid Credit Repair Scams

Knowing how to avoid credit repair scams can save you a lot of time and money. There are some legitimate companies that can be helpful, such as credit counseling services, but if you end up with a fraudulent company, you’re bound to be out quite a lot of cash. In reality, a sure-fire way to avoid these scams is to repair your own credit.

These scams involve promises of cleaning negative credit information from your credit report. There is no legal way to do that, so don’t believe the hype. Other things to look out for are companies which charge fees before they provide a service, and companies which recommend you start a new identity to get a fresh credit report. These companies may also tell you to dispute all items on your report in hopes the loan provider will not respond to the dispute, resulting in the removal of the item. They may advise you to avoid direct contact with the reporting agencies so you do not learn the truth about their scam.

You can repair your own credit, and you do not have to waste money paying someone else who only offers promises. For starters, you can request a free credit report from each of the credit reporting agencies. You are entitled to one free report per year, and a free one anytime you are refused credit; so do not pay a company to give you your report. Check the report for accuracy. If you find erroneous items, send a letter to the reporting agency stating which item you’re disputing, and why. Be honest and do not dispute just hoping to get things removed.

After that, you need to start building good credit. It will cost you extra in interest fees, but you can provide your own credit repair by paying on a new loan or credit card. Get a secured card and keep up with it according to the agreement. While you are building your credit with it, other items will eventually fall off your report. Most unpaid items disappear after seven years.