Credit Repair Scams
The only way to restore bad credit is through time and effort. Companies that promise quick fixes for hundreds and even thousands of dollars in fees are nothing more than scams. Not only do these false companies cost you money, but their advice can lead to your prosecution. Warning signs of a scam include asking for money before services are performed and keeping you in the dark about your rights and what you can do about your credit for free. They also often suggest creating a "new credit identity" by applying for and using an employer identification number instead of your social security number as a quick solution. Remember, falsifying any social security or credit information is a federal crime.
Before throwing your money at these services, remember that you are protected under the Credit Repair Organizations Act. The act ascertains that credit repair companies cannot demand payment until they have rendered the promised services. The Act also specifies that there must be a written contract that allows for a three-day waiting period where you have the chance to nullify the contract without incurring any fees. The contract must include payment terms for services, the total cost, a description detailing promised services, a time period in which services can be expected to be completed, guarantees offered by the company and the company's name and business address. Time is the only method that can truly heal your credit report. Most negative information stays on your report for seven years, while bankruptcy information stays for ten.