Credit repair scams are very common as scammers take advantage of people with debt problems and promise to fix their credit and clear their credit reports of adverse information for up front fees. I have been warning you about these scams for eleven years. Recently the Consumer Financial Protection Bureau (CFPB) entered into a settlement with the companies operating the largest credit repair operations in the country including Lexington Law and CreditRepair.com. The CFPB alleged that these companies violated a range of violations including demanding illegal advance fees for credit repair services. According to the terms of the settlement, which still must be approved by a judge, these companies are banned from telemarketing their credit repair services and imposes a 2.7 billion dollar judgment against the defendants.
Your credit report is one of the most important documents in your financial life. The information in your credit report as maintained by the three major credit reporting agencies, Equifax, TransUnion and Experian is used to calculate your credit score. This is used by financial institutions to evaluate your creditworthiness and can affect your ability to get a credit card, mortgage loan or a car loan. It also can affect the rate that you will be charged on such loans. In addition, your credit score is used in many states by companies in making hiring decisions and landlords consider credit scores when determining whether or not to rent an apartment or home to someone.
TIPS
Don’t fall prey to scammers operating phony credit repair companies and never pay an upfront fee to one of these companies. Advance fees for credit repair companies that operate for profit are banned by the Credit Repair Organizations Act.
Negative information on your credit report remains on your credit report for seven years and bankruptcies for ten years. Anyone who tells you otherwise is just trying to scam you. Many of the scam credit repair companies use illegal tactics such as applying for a federal employer ID to use as your Social Security number when applying for credit. This is illegal.
If you need real credit counseling you can go to this section of the Department of Justice’s website where it lists agencies approved to assist consumers with debt problems. https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111 You also may consider contacting companies that are affiliated with the National Foundation for Credit Counseling at this link https://www.nfcc.org/
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