5 Red Flags to Identify a "Credit Repair" Scam

By Tracy L. Hirsch

We’ve all seen the ads for repairing your credit with a company. While some are legitimate, some Louisville credit repair companies use illegal actions that can get pinned on you.

Whether or not you choose bankruptcy, if you’re thinking about getting help to rebuild your credit, here are a few red flags to help you recognize and avoid these scams.

1.) A requirement to pay money upfront.

If a credit repair company in Louisville is asking for money upfront from the consumer before any services are performed, then this is a red flag. A legitimate company will inform you of actions that you can take on your own, and they’ll give you those tips for free. They should be there to help you, not put you into further debt!

While you can’t completely prevent identity theft or credit fraud 100% of the time, there are things that you can do to greatly minimize the risk.

2.) Lack of information.

Don’t ever be afraid to ask questions. Transparency is your friend, and reputable companies should have nothing to hide. You should be informed of your legal rights and given a copy of “Consumer Credit File Rights Under State and Federal Law.”

This particular document lets you know your rights in regards to obtaining a credit report and disputing inaccurate credit report information. You should be informed through the entire process since they are working for you. If a credit repair company tells you not to contact the credit bureau directly, then be very leery.

3.) Questionable contract integrity.

Your contract should be given to you before signing it so that you can carefully review it. It should contain the following:

> The fee for the services performed

> Detailed information about the services being performed on your behalf

> The date by which the services will be performed (or the time period required to perform the services)

> The name and business address of the organization

> A statement letting you know you can cancel the contract within 3 days

4.) Being Asked to Create Anything “New.”

If a credit repair company in Kentucky (or any other state) suggests that you need to create a “new” credit report by applying for an Employer Identification Number (to use instead of your Social Security Number), then this can be a clear sign of fraud.

Don’t ever let a credit repair organization try to talk you into doing something illegal. If you’re ever in doubt, speak with an experienced and reputable bankruptcy attorney.

5.) Everything sounds too good to be true.

If it doesn’t feel right, then it probably isn’t. Be wary of any credit repair company that promises to remove reputable information that’s on your credit report. Do not partake in any action that seems illegal. If you follow any illegal advice and commit fraud, then you may be subject to prosecution.

Use common sense and trust your gut. Rebuilding credit isn’t an easy process, and there are no shortcuts. Often times, filing for bankruptcy may be the best option and other times it may not.

I’m here to guide and help you through the process. Contact me to set up a no-obligation, free consultation, and let’s get your finances back on track.

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