How to Avoid Credit Repair Scams

A sure sign of a scam is a company that promises to repair your credit. No one can remove accurate information from your credit report. It is illegal for credit repair companies to promise specific results. They can only promise their actions.

Advanced fees should be your first clue that you are facing a credit repair scam. It is illegal for any company to charge fees for credit repair before services have been rendered.

Some credit repair companies encourage you to obtain a tax identification number to use instead of your social security number. However, this is illegal. According to Carol Kando-Pineda with the Federal Trade Commission, this illegal advice could impact you if you follow it:

“If the consumer follows illegal advice and they commit fraud, they could be in hot water as well. They could be charged with mail or wire fraud for providing false information.”

Credit repair companies cannot make false claims and they cannot charge you before providing services. However, this is frequently the case with many credit repair scams who take your money today and disappear tomorrow. Even scarier, you might be the subject of identity theft if your information is used to obtain new credit.

If you do sign a contract with a credit repair company, make sure that you understand their fee structure. You have a three day cooling off period in which you may cancel the contract.

Of course, you can do what they do for free. You simply dispute all negative information that you believe is inaccurate. The more evidence you have to support your claim, the better. This can be helpful if your online dispute is denied and you must send in a more detailed dispute by mail.

The Fair Credit Reporting Act provides access to a free credit report if you are:

  • unemployed
  • on welfare
  • have been the victim of fraud
  • have had adverse action taken against you by a lender in the past 60 days.

The Fair and Accurate Credit Transaction Act provides access to a free credit report from each of the three main credit bureaus once annually. The report is free but scores cost extra.

Kenneth Long
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Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.

Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.

In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.

Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!

Favorite quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson
Kenneth Long
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