Credit Repair Scams That You Should Avoid At All Costs

A bad credit score rating can sometimes make you desperate. To the point, you’re willing to work with anyone who promises they can help you wipe it out. Moreover, assure you of raising your score by a significant number of points.

However, your desperation shouldn’t put you in greater trouble than you already are. Promises such as these are credit repair scams you should avoid. To begin with, scammers will do anything to fool you so that you put your trust in them. But afterward, they won’t do anything to help you about your credit problem. Here are some of the ways dishonest operators might use to deceive you.

Scam #1 Non-disclosure of their credit repair procedures

Remember you are well within your right to know what a credit repair company can do to help you. Moreover, how they intend to do it. Beware of an operator who tells you to just put your faith in them without getting the facts. Likewise, be suspicious if the company is avoiding any of your questions about the kind of work they do. Remember you shouldn’t go into credit repair blindly.

Scam #2 Promises to give you a new credit report

The lure of a new credit report, moreover one without anything bad on it would sound inviting. It’s mainly enticing if you’ve suffered from a bad credit score for a long time and don’t see any hope of getting out of the red on the horizon. However, you should know this type of promise can land you in jail. The scam of creating a new identity involves:

● Assigning you a new Employer Identification Number (EIN)
● Acquiring for you a new Credit Privacy Number (CPN)

The use of a new identity is also part of the file segregation scheme. The Indiana Department of Financial Institutions reveals the plan targets people who have filed for bankruptcy. In fact, some scammers make it a point to call these people to convince them about using this particular scheme. Here’s how they do it.

● The credit repair company claims you’ll be unable to get credit for the next ten years because of you filed for bankruptcy. The truth is:
◦ A bankruptcy mark stays on your credit record for ten years
◦ Your ability to get any credit during this time is subject to the individual criteria set by a creditor. Hence, you might still be able to get one provided you meet their requirements.
● The credit repair company advises you to do file segregation. Moreover, informs you it’s perfectly legal to do so. The truth is it’s illegal.

Moreover, you could end up being charged with a federal crime if you do any of the following. As such, you could end up paying penalties or worse, and you’ll end up in prison.

● You lied on an application for a new loan or credit by using a new identity
● You misrepresented your Social Security Number
● You acquired a new EIN by deceiving the Internal Revenue Services

Scam #3 Filing a false identity theft claim

The Simple Dollar reveals the use of identity theft to clean up your credit report. Hence, its label as crying wolf referencing the famous fable “The Boy Who Cried Wolf.” The ruse involves:

● Convincing you to make a false claim of identity theft
● Helping you file the necessary reports to substantiate your claim

You should be aware you’re committing a serious crime if you take part in this scheme. In fact, you might end up going to jail when you’re caught.

NYC Consumer Affairs reveals another scheme involving identity theft. If you’re asked by a credit repair company to sign a form allowing them to represent you then be wary, moreover, if they require you to submit personal information. If you do, you might end up the victim of identity theft. Here are several tips you should keep in mind.

● Don’t sign a blank paper
● Don’t give out any personal details without knowing what it’s for

Scam #4 Paying for an authorized user status

The scam involves renting the credit card account of a stranger with a good credit standing. While gaining an approved user status can boost your credit, there’s a right way to do it. That is, you ask a family member or a close friend for their help. If you have to pay for it, then you would be liable for bank fraud.


Desperation can get the best of you. But you shouldn’t let it. If you do, then you risk more than just a poor credit score rating. You could become guilty of a federal crime by falling prey to the scam of a disreputable credit repair company. The worst part, you could end up paying a hefty fine or do jail time because of it. Hence, it’s in your best interest to know the different scams out there to be able to avoid them. Check out reviews of to get an idea of a reputable company you could work with.



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