The Better Business Bureau is warning consumers to beware of companies making false promises of quick credit repairs. They have seen an increased number of complaints against local and national credit repair companies that are claiming to be able to erase bad credit for upfront fees of $250 or more. So can you actually erase bad credit? Consumers can have credit reporting errors corrected, but unfortunately, if the debt is valid no company can make it disappear.
For a fee, credit repair companies promise to clean up your credit report so you can obtain a car loan, mortgage or even a job. Based on the BBB experience, many of these companies fall short on their promises. After consumers pay these companies, sometimes thousands of dollars in fees, they do nothing to improve the consumer’s credit and simply disappear with the money.
The Federal Trade Commission has the following tips to help consumers avoid the pitfalls associated with these credit repair companies:
•Avoid any company that tells you it can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
•Avoid any company that charges an upfront fee for credit repair services. This is against the law.
•Beware of any credit repair company that does not tell you your legal rights and steps you can take to repair your credit score free of charge.
•Avoid any credit repair company that tells you not to contact a credit reporting company directly.
•Avoid any credit repair company that advises you to dispute ALL of the information in your credit report.
•Avoid any company that suggests creating a new credit identity or applying for an Employer Identification Number to use instead of your Social Security number. Not only is this illegal, it leaves consumers open to prosecution for fraud.
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