What are Some Common Credit Repair Scams?

Some Common Credit Repair Scams:

If your credit has been giving you serious headaches for some time now, you might have reached that point of trying to find the best solution that will get rid of all credit troubles you have. This is why it is not a surprise that more and more people turn to credit repair companies.

Unfortunately, the credit repair industry is also filled with scammers who make unknowing victims believe that they have quick fixes for their financial hurdles.

To save yourself from more serious troubles, make sure to avoid the following common scams in credit repair:

CPN and EIN Scams

Probably the most common and popular credit repair scam and undoubtedly among the riskiest ones involves the creation of a brand new credit identity for you to leave behind your lousy and old identity in the past. This scam lures desperate consumers with promises of immediate wipeout of bad credit to create blank credit reports or a clean slate to allow consumers who have credit issues to start from scratch all over again.

This scam may come in various flavors although it almost always involves you giving payment to a company to assign you with a new CPN or EIN in lieu of your legit SSN on financing applications in the future. Although CPNs and EINs are not inherently illegal in themselves, lying is definitely illegal as well as using them as an alternative to your SSN during credit card or loan applications.

Crying Wolf

Nothing can be as terrible as becoming a victim of identity theft. The good news is that if your name was used for opening fraudulent accounts, the FCRA or Fair Credit Reporting Act requires immediate removal of these accounts from your credit reports. As long as the fraud is reported properly, you can have the accounts removed from the credit reports in a matter of four business days.

Now, you might have an idea of what this scam is all about. Unethical credit repair companies will convince you into crying wolf and claiming to be an identity theft victim to have your credit reports wiped off legitimate but derogatory reports. Such companies may even help you file identity theft reports or falsified police reports just to back up your ruse. Sadly, going along this kind of deceit will make you break different laws and might lead to substantial fines or jail time.

Trade Line Renting Scam

A completely legitimate way to help rebuild damaged credit is asking a family member or friend to add you as an authorized user to their existing credit card account.

However, there are consumers who are too shy to ask for this or others don’t even have a loved one who is able or willing to help them this way. This is where the trade line renting scam enters the picture.

Some companies act as brokers between consumers with credit challenges and those who have well-aged and well-managed credit card accounts. Participating in this extremely dishonest way of credit manipulation, you might end up facing a lawsuit.

Remember that there are still many ways of repairing bad credit and there is no need to scam your way there. Taking the risk just isn’t worth it.

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