Evade Credit Repair Scams

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By Consumers Union on Tuesday, December 3rd, 2013

In recent years, we’ve alerted consumers to credit repair companies that prey on consumers who may be looking to improve their creditworthiness or are confused about the nature of the credit-scoring system. Credit repair agencies often promise a higher credit score in a short amount of time – and may even use deceptive means to solicit clients.

For example, William from Fallbrook, CA, reported a disturbing credit repair story to us. William told us that last year, a credit repair website lured him to check his credit score. The website claimed that he had a low score and urged him to register for the service to improve his credit rating. Later, William discovered from a lender that the website’s claim was false, as his credit rating was almost perfect. William reports:

“I was persuaded last fall to use a credit improvement web site. They said my credit score was 615. They inferred that I should try to improve my score because it was only a “fair” score. It was still showing about 615 on their site when I went in to buy a new car in December. Because of my low score I decided to pay cash, assuming I wouldn’t be able to get a good interest rate with my credit. At the purchase closing the dealer asked if I wanted to use Ford Motor Credit, because I could get up to a $2,000 rebate if I was approved. I said “well okay, I’ll try it. Five minutes later the credit manager came in and said, “Your credit is spotless, you can have the full $2,000 rebate and we’ll finance your new car at 4% interest.” I was pleasantly shocked. I feel someone wasn’t being honest. I wish I had better access to my real credit score.”

William told us that luckily, he never agreed to the service and did not give them any money. We urge you to be equally suspicious of these offers. If you’re concerned that you’re being fraudulently solicited by a credit repair agency, please click here to report them to the Federal Trade Commission (FTC).

Although the credit repair agency that William encountered appears to be particularly deceptive, Consumers Union recommends that you be wary of all credit repair services. Instead of paying a credit repair agency hundreds of dollars, you can improve your credit yourself by making timely payments and ensuring that any errors on your credit report are corrected. Check out Consumers Reports’ advice for improving your credit score here.

William’s story also highlights the need for a free, reliable credit score with annual credit reports, so that consumers can be confident that they have complete, accurate credit information. There’s currently a bill pending in Congress that would secure that important reform – please show your support by clicking here.

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