If you see ads or receive offers that guarantee to increase or repair your credit, there is a good possibility that it’s a scam. Here's what you need to know about credit repair scams.
Warning Signs of a Credit Repair Scam
- Pressures you to pay up-front fees
If a company asks you to pay up-front fees for a service you should treat it as a scam. The federal Credit Repair Organizations Act says that companies can’t request or receive payment until they’ve completed the services they’ve provided.
- Promises to remove negative information on your credit report
No one can get rid of negative credit information on your credit report.
- Tells you not to contact the credit reporting companies directly
Another warning sign is if the company tells you not to contact the credit reporting companies directly. Disputing errors in your credit report is a free legal right available to you.
- Doesn't explain your legal rights
If the company doesn't explain your legal rights this could also be a red flag. Also, if you have just signed up for a credit repair service, you have the right to cancel your contract within three business days at no charge to you.
How to Find a Reputable Credit Counselor
Licensed or certified credit counselors offer services through local offices, online, or on the telephone. A list of approved credit counselors is available online.
How to Report Credit Repair Fraud
If you’re a victim of credit report fraud, report it to the Washington State Office of the Attorney General.