Look for the red flags of a. Warning signs for credit repair scams include companies that ask you to pay before you provide services. The company may tell you that it can guarantee a specific increase in your credit score or remove negative credit information on your credit report, even if the information is accurate and up to date. Fake credit repair companies resort to illegal tactics or use the promise of clean credit to lure you into committing crimes yourself.
For example, they may offer to sell you a new Social Security number to use in your loan application. The number was probably stolen, possibly from a child, and using it could send you to prison. It is worth noting that even the most reputable and reliable credit repair services cannot legally do anything that you cannot do yourself. By law, you are entitled to a free credit report every 12 months from each of the three major national credit bureaus: Equifax, Experian and TransUnion.
Let's say you request a copy of your free annual credit report from the three major credit reporting agencies: Experian, Equifax, and TransUnion. Dun and Bradstreet, Equifax and Experian are the three main credit bureaus that maintain reports on your company's credit. If you find errors in your credit report, contact the credit bureaus and the company that provided you with the information to eliminate errors in your report. If your rights under the CROA have been violated by a credit repair company and you have lost money, you have the right to sue for the money you lost.
It's illegal for credit repair companies to lie about what they can do for you or charge you before they help you. According to the Federal Trade Commission (FTC), a Texas company told consumers it could increase its credit scores by up to 200 points in a matter of weeks using advanced dispute techniques that included making false claims that black marks on customers' credit were the result of theft of identity. Commercial credit bureaus often send you warning notifications when a derogatory mark is about to be added to your credit report. If the information is accurate, there is little that anyone, even a professional credit repair company, can do little to change it.
Send the letter to your creditor and credit bureaus, as some creditors do not report the information to credit bureaus. Credit scores are calculated based on information in the consumer's credit report, and sometimes that information is inaccurate. If a company promises to create a new credit identity or hide its bad credit history or bankruptcy, it is also a scam. This can happen when creditors report misinformation to the credit bureau or if an identity thief takes out credit in the consumer's name.
As with personal credit, you can pay a credit repair company to clean up your business credit, or you can do it yourself.