“We can erase bad credit!”

“Create a new credit identity!”

“Remove bankruptcies, judgments, liens, bad loans from your credit file forever!”

We all want to improve our credit. Whether we have excellent credit or shaky credit, getting a better credit rating will get us better loan and credit card terms than we already have available to us. We can take steps to legally improve our credit, but scam artists will attempt to mislead us and take our money.

Before you agree to the services of a possible rip-off, educate yourself and beware of credit repair scams. These scammers will encourage you to engage in illegal actions, charge you money for it, and you may be subject to prosecution for taking their bad advice. Take these tips and guard yourself against credit repair scams.

Beware of any agency that wants you to pay for services before they do anything.
They’ll charge upfront fees and then dispute all your negative credit accounts to have them temporarily removed from your file. These scam agencies might recommend that you don’t contact the credit bureaus directly; they’re afraid you’ll admit that your negative accounts are accurate and blow the whole game.

When the credit reporting bureau researches the disputed accounts and finds them to be accurate, those accounts will then be put back in your credit report. Your credit might be “repaired” for a short time, but it’s not a permanent fix. Instead of paying an agency for useless services, use that money to pay down your debts, which really will help your credit.

Be cautious of any agency that does not tell you what you can do for yourself for free.
You don’t need any third party to obtain your credit report, to dispute inaccuracies in your credit report, or to negotiate payment arrangements with your creditors. Don’t let them trick you into believing that you can’t manage your own credit or what’s in your credit file. Take steps to legally improve your credit and your credit history will gradually improve.

Watch out for any agency that wants you to create a “new” credit identity.
They may suggest that you apply for an Employer ID Number to use when applying for credit, instead of using your Social Security Number. It is a federal crime to obtain an Employer ID Number under false pretenses, to misrepresent your Social Security Number, or to lie on a loan application; you could also be charged with wire or mail fraud if you use the phone or postal service to give false information.

You might wish you could forget your past credit problems and start with a new identity, but you just have to improve the identity you already have if you want to do it the legal way.

Legitimate Credit Repair Agencies
Being on the lookout for credit repair scams, you may find that you still want to find a legitimate credit repair agency to help you get your credit back on track.The Credit Repair Organizations Act spells out what legitimate agencies are required to do.

Credit repair agencies are required to provide you with a written contract .This contract must include the business name and address; payment arrangements and the total cost of the service; a detailed description of the service they will provide; how long it will take for results; and any guarantees they make.

They are not allowed to make any false claims or charge you until services are completed. They are also not to perform any service until three days after signing your contract; this is so you have those three days to cancel the contract if you change your mind.

Even if you decide to use the services of a credit repair agency, don’t forget that anything they can do, you can do yourself for free.

If you find you have been victimized by a credit repair scam, don't hesitate to report the agency to your local consumers affairs office or your state Attorney General. These offices can be found in the blue pages of your telephone book.