Credit Repair Scams

BBB reports aren't always helpful for detecting a credit repair scam?

When looking at BBB reports for credit repair companies, it's easy to conclude that any company with an F rating is a bad company. But this isn't necessarily the case.

BBBs across the country have different criteria for judging credit repair companies. While in some areas BBB ratings may be a good tool to use, because of the negative perception of the credit repair industry, some BBBs will automatically give any credit repair company an F rating regardless of the number of customers they have helped or complaints that have been submitted.
It is an unfortunate reality. Wherever there are people with a need, there are others who will try to take advantage of that need.

Credit scores are crucially important in today's society. If you are like most people, your credit score factors into the home you are able to buy, the car you drive, and maybe even the jobs you are able to work. Because of this, when someone's credit score begins to stand in the way of achieving their goals and has a negative impact on their, and their family's, quality of life, they can become desperate to improve their credit.

Con artists feed on this desperation, and the more desperate you become, the more of a target they consider you to be. This is precisely why some credit repair scammers have been known to monitor bankruptcy notices. When things are at their worst, and you are forced to file for bankruptcy, these credit repair scams come out of the woodwork claiming to be able to provide the ideal solution for your needs. And at this point when you are facing the reality of how much 10 years of bad credit can affect so many aspects of your life, a "credit repair" expert gives you the hope you are looking for. For only $1,000, they will remove all traces of the bankruptcy from your credit reports or even better; help you get a brand new credit report so you can start over again with a clean slate.

The voice in your head tells you it is too good to be true and at any other time you would know better. But at this low point in your finances, the less rational voice musing "what if?" is convincing enough that you do something you're gut is telling you is a bad idea. The desperation clouds your judgment and you can't overcome the fear of letting this opportunity, as unsure as it seems, get past you. It comes as little surprise when a few months down the road, your credit is in no better shape and your wallet is $1,000 lighter. After all, you knew it was a bad idea at the time.

This type of credit repair scam is pretty easy to identify, but that is not always the case. Some credit repair clinics seem far more legitimate and catch many people completely off guard. They still prey on the desperation bad credit can cause, but they are more subtle in their pitch.

To help identify a credit repair scam, below are 3 warning signs to look out for. Some are serious red flags while others by themselves are merely indicators that their may be something nefarious going on, but if any credit repair company exhibits a number of these warning signs, you should be careful to keep your pocketbook close.

Warning Signs of a Credit Repair Scam


1) Offer to Create a New Credit Report

2) Require Large Upfront Payments

3) Don't Have a Contract

4) Only Accept Cash, Checks, or Money Orders

5) Use a Third Party Payment System