A Couple of Common Credit Repair Schemes

Credit Repair Schemes

A Couple of Common Credit Repair Schemes

With a perfect storm approaching due to rising loan defaults and a slowing economy fueled by falling housing values, many people are struggling to manage their debts these days. Each day more and more turn to companies that sell credit repair services. Since none of these firms are regulated by Federal law, anybody can open a credit repair business. As a consequence, the services provided can vary significantly from one company to the next. If you’re fighting with debt, a legitimate credit counseling or credit repair company can be useful. However, some may be harmful.

Many credit counseling corporations are set up as non-profit corporations. This will create an appearance that these firms exist only to keep an eye out for you — that they exist to supply a public service. This non profit standing permits them to gain a sympathetic advantage by making an image that tends to indicate, “we are the good guys”. Sadly , in a few cases, the services provided have a concealed agenda and tons of concealed charges. These outfits claim that, for a charge, they will clean up your credit score so you can get another loan, get a better mortgage, better insurance rates, or perhaps a job. Fundamentally , they offer to manipulate or even create credit history information that creates the appearance that you’ve been a responsible credit customer. Frequently the guarantee includes removing all overdue or delinquent payment info and other prejudicial data from your credit history. Naturally, to perform this service you simply need to pay about a handsome down payment to the company, and consent to one of many possible credit schemes. One of the more popular credit repair schemes is to “make a new you” by trying for and getting an Employer Identification Number for you to use rather than your Social Security ID on new credit applications. Another common trick is “piggybacking,” which is adding yourself as a permitted user on another individual’s credit account. Tthe goal of this scheme is that the other person’s account (with the good history appears) on your credit score, thus raising your credit report. In addition to being dishonest, these tricks aren’t legal. It’s a Federal crime to lie on a loan application or get and use an Employer ID number under fake pretenses. And the claims to get rid of negative info from your credit score? Remember, NOBODY can legally remove correct and well-timed negative info from your credit score.

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