Credit Repair Scams
:: Credit Repair Scams and Bankruptcy

how to spot Credit Repair Scams ant credit repair scan prevention tips

You are a target for credit card scam if you have filed for bankruptcy.

Fraudulent companies sometimes offer to provide consumers with different tax identification or social security numbers in order to create a new credit file.

This is often called â€"file segregation.”

Here, you are promised a chance to hide unfavorable credit information by establishing a new credit identity.

Avoid credit repair companies that tell you truthful information can be changed or erased to improve your credit or that only the credit-repair company can remove old or inaccurate information. These claims are false.

Avoid credit repair companies that ask for payment before providing services. Federal law requires credit repair services to give you a explanation of your legal rights, a detailed written contract, and three days to cancel. This applies to for-profit services, not to nonprofit organizations, banks and credit unions, or the creditors themselves.

Avoid any credit repair company that does not tell you your rights.

Avoid any credit repair company that does not point out what you can do yourself for free. Remember you can do anything a credit repair company can do for free or for only a few dollars.

Avoid any credit repair company that tells you not to contact the credit reporting agency.

Be aware of false claims, such as credit repair companies telling you that accurate information will be changed or erased or that only they can remove old or inaccurate information.

Be wary if you are asked for a large sum of money before the credit-repair company completes the job.

Be aware of Credit by phone scams.

Pay-per-call or 900-number services have become a popular vehicle for credit scams.

Advertisements promise that â€"guaranteed” credit or cash loans are only a phone call away. Instead, the caller might only receive a list of banks offering low-interest credit cards or a booklet on how to establish credit, with a very expensive phone bill.

Beware of promotions for gold or platinum cards that promise to get you credit and build your rating.

Although they may sound like all-purpose credit cards, some cards only permit you to buy merchandise from special catalogs and will not help you obtain other credit.

You also might be asked to call a 900 or 976 exchange number for more information. These phone charges add up quickly.

Be aware of Checking-account scam.

This scam, which tricks you into disclosing your checking-account number, typically begins with a postcard advertising easy credit approval or low-interest credit card rates.

When you call, you are asked for your checking-account number as â€"verification.” Your number then can be magnetically encoded on a draft, which is forwarded to your unsuspecting bank for payment from your account.

Never give out your bank account or credit-card number unless you know the company is reputable.

Be aware of Catalog credit card scams.

This is often offered by mail order catalog companies that require large down payments. The products are usually high priced. These catalog companies seldom report to credit bureaus.

Be aware of Advance fee loan scam.

Someone promises to find you a loan in exchange for an advance fee.

Be aware of Overdraft protection scam.

If you write a check that exceeds your account balance, the bank honors the check and charges the difference to your credit card account. You will now liable for all other costs associated with credit card cash advances.

Be aware of credit card insurance scam.

This is insurance offered by a credit card issuer such as life insurance, disability, unemployment, hospital insurance or others are usually unnecessary and always overpriced.

Banks love to sell this overpriced insurances because the banks are the beneficiaries as the payment is used to pay your outstanding balance if you die, while they collect hefty premiums in the interim.

Be aware of Credit Card Registration Services scams.

These companies offer you protection from loss of your credit cards with just one phone call. Ask yourself how often in your lifetime are you likely to lose all of your credit cards?

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