By: Gordon Thomson
In this day and age, everyone needs credit, whether to buy a car or a house, obtain a loan or a credit card, even to get a job and life can be pretty tough if your credit stinks.
There are many good and legitimate agencies who for a reasonable startup fee and a monthly charge ranging from $40 to $80 will help you repair your credit. However an economy that requires a good credit score to get the best interest rates, better housing and even a decent job is creating an industry of scammers who prey on consumers eager for the quick fix to their credit problems, but in the end they will only take your money and offer nothing in return.
If you worry that you might fall victim to a credit repair scam, then the following information might give you a better idea what to look out for and save you money that you can't afford to lose.
� First, walk away from any company requesting a high startup fee, if you do not consider their fee reasonable don't pay it!
� A reputable company will offer you a contract that allows you to cancel without recourse, in other words you can cancel without owning them another penny.
� Be leery of any organization guaranteeing they can remove every derogatory item on your report, there is no way anybody can make this guarantee without first contacting the credit bureaus and the creditors.
� No one can guarantee to get you a particular credit score, say 680 when you now only have 350, if someone states this they are just telling you what you want to hear. Raising your credit score takes time and a combination of erasing the dings and establishing good credit.
� You know you are working with a fraudulent company if they try to get you to change your identity by getting an Employer Identification Number (EIN) and use this to create a new credit history. Not only is this a scam, IT IS AGAINST THE LAW for you to use this as your personal identification to obtain credit.
� Never let a credit repair service fool you into believing that they can do something to repair your credit that you can't do yourself. Your best bet is to repair your credit yourself and protect your personal identification from those who could damage your credit even more than it presently is.
� If you feel you have already been a victim of a scam you can report the company to the attorney general of your state, also submit a complaint to the Federal Trade Commission (www.ftc.org) and the Better Business Bureau.
There are a good many reputable credit repair agencies and credit counsellors available in the yellow pages and on the internet, however there is nothing these professionals can do for you that you cannot do yourself and for a lot less money.
Guaranteed Loans or Credit Cards:
Although most lenders are owned and operated by legitimate professionals, there is an industry of fraudulent loan brokers and credit companies ready to take advantage of unsuspecting consumers by misrepresenting the availability of credit and credit terms in order to cheat individuals out of money.
Be wary of companies charging an advance fee that supposedly guarantee a loan or credit card. These fees can range from $100.00 to several hundred dollars. In most cases, the customer never receives the loan or credit and the con artist disappears with the money.
Fraudulent lenders prey on consumers eager for credit by placing enticing advertisements in classified sections of local and national media, the internet, radio and cable television, which gives them the appearance of credibility. However, advertising in recognized media sources is no guarantee of a company's legitimacy.
Legitimate lenders never guarantee that you will receive a loan or credit card before you apply, especially if you have bad credit, no credit or are in bankruptcy and they never ask you to pay money up front.
A consumer who is not credit worthy and finding it difficult or impossible to obtain a credit card can more easily obtain a debit card from their bank, allowing him/her to make plastic transactions. Debit cards may also be used by workers to send money home to their families holding an affiliated debit card.
Secured credit card (secured by an up-front deposit) are popular among college students who have not yet established a credit history. Word of warning! Once you have established a credit history you will most likely be inundated with credit card offers, mostly from legitimate companies, just be careful how you use them and don't run up charges you can not easily pay-off at the end of the month.