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Common Credit Repair Scams and How to Avoid Them

Bankruptcy, credit counseling, debt settlement and negotiation, debt collection agencies- they are all booming as the debt plague is also on the rise. Expect that scammers would join the bandwagon as they hope to have their share of the market. The most common types of debt-related scam are the credit repair service offers as specified below.

Bad credit cleanup

The fact is no one can erase negative information on your credit report if it is accurate. It stays there for a minimum 7 years, 10 years for bankruptcy, and 15 years for certain taxes.

Now, if the data is really an honest mistake, it is free to dispute the item. All you need is to request a copy of your record from one of the major credit checking agencies. Reports are free on some cases such as if you were denied credit, you are unemployed or you rely on welfare, or you are a victim of credit card fraud. Otherwise, a minimum fee applies. The three major credit bureaus are Equifax, Experian, and TransUnion Corp. Take note also that there may be a slight variation of your report from the three so better get in touch to each of them for your comparison.

If you intentionally avoided paying your bills because of a valid dispute, or you had emergencies which is why you were not able to pay, state it in your explanation to the bureau. Possible reasons may include a sudden illness or job loss.

File segregation

Someone might approach you offering you different tax identification or another social security number to mislead the credit bureau.  This is called “file segregation”. Aside from being impossible, this action constitutes to falsification of legal documents and you can be hauled to jail as a result.

Unsolicited emails for credit services

Credit repair scams may also launch from your inbox. The same with emails which promise you a fortune deposited under your name in Nigeria; unsolicited emails about credit relief are also scams.

Common to scams is they ask payment from you when in fact they had not delivered any service or you don’t have anything to pay. This should make you think more than twice. Always seek for their proof of legality. Are they a registered business?

When something is too good to be true, it certainly is!

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