No doubt, it’s tempting to sign up for a “quick fix” to clean up your credit. Who wouldn’t want to instantly find a way to add 100 or more points to a credit score to qualify for a rewards-packed credit card? Or maybe, finally, qualify for a great deal on a car loan?
But the Federal Trade Commission and others are warning that any company that charges money in advance for credit repair is going against the law.
The federal Credit Repair Organizations Act, which was enacted in 1996, makes it illegal for credit repair companies to lie about what they can do to clear up a clouded credit report, or charge upfront fees before they do the job they promised to do.
Don’t get ripped off by oddball credit claims
Things can go really bad when consumers latch onto ridiculous claims — such as that somehow you can piggyback on a stranger’s good credit to shore up your credit history.
Yes, there are even a string of YouTube videos to convince you this is brilliant idea.
Some outfits have said things like: “From 620 to 780+ in 3 Weeks? Yes!”
The Federal Trade Commission took action in late June to stop an operator called Grand Teton Professionals that pitched fake credit repair services via various websites, including DeletionExpert.com, InquiryBusters.com, and TopTradelines.com.
The FTC complaint alleges the defendants bilked consumers out of $6.2 million.
Since at least 2014, the FTC claimed, the company and its websites operated an unlawful credit repair scam that deceived consumers across the country.
Don’t bet negative marks will disappear
The egregious claims included falsely promising that they they could remove negative marks on a consumer’s credit report as well as extracting thousands of dollars in illegal advance fees, according to Gregory Ashe, senior staff attorney for the FTC in Washington, D.C.
Negative marks could be removed in the case of ID theft, he said, such as if someone opened a credit card using your Social Security number. But otherwise, a credit repair outfit cannot remove legitimate negative remarks. Various negative marks, such as a car repossession, would last seven years on your report and then fall off.
You can, of course, dispute any errors on your own.
In addition, the websites actually went as far as including terms that would prohibit a consumer from making disparaging comments online about the companies. Somehow the consumer could face a $25,000 charge for making negative remarks.
Really? The threat alone, though, meant some consumers wouldn’t take a chance saying a negative word, according to regulators.
“It’s enough to chill a consumer who believes it means what it says,” Ashe said.
As a result, many consumers said they couldn’t find complaints online about the credit repair sites so they thought it was OK to send thousands of dollars, Ashe said.
Some consumers, though, did reach out and complain to the Better Business Bureau, the Federal Trade Commission and their state Attorney General. Such data is gathered and monitored by the Consumer Sentinel Network, an online investigative tool of the FTC. And those complaints helped the FTC in its case.
Ashe said the hope is that others engaging in wrongful practices will take notice of the action against Grand Teton Professionals. (No one answered calls to the company last week. Only recorded music played on the line.)
In Michigan, the Attorney General’s Office has received 13 complaints relating to credit counseling and credit repair issues in the last calendar year.
Consumers are warned to stay away from a company that promises that “it can get rid of most or all negative credit information in your credit report, even if the information is accurate and current,” according to the Michigan Department of the Attorney General’s alert on credit repair scams on its site at www.michigan.gov/ag.
Consumers paid thousands for nothing
Having bad credit can mean that you aren’t able to take out a loan because lenders don’t want to deal with high-risk borrowers.
And when consumers are in a bind, they don’t always think clearly when they see a possible quick fix to their troubles.
Complaints found on the Better Business Bureau site, for example, indicated that consumers paid anywhere from $1,100 to $4,000 to Top Tradelines to piggyback on someone’s credit card accounts to build their own credit history.
“For a fee, defendants offer to register consumers as ‘additional authorized users’ on one or several credit cards or line of credit accounts held by unrelated account holders with long-standing positive payment histories (a practice also known as ‘piggybacking’ credit),” the FTC said in its complaint.
We’re not talking here about the long practice of making a son or daughter an authorized user on a parent’s credit card. That’s a legitimate strategy for building credit.
Instead, we’re talking about an outside company cooking up a deal that involves paying someone with great credit to give someone with bad credit a shot as being an authorized user to build up a credit history.
“They almost act like online companies that set up blind dates,” said John Ulzheimer, a credit expert who formerly worked for credit-scoring company FICO.
Like online dating, you’re not always talking about a happy ending, either.
“The reality is making the person an authorized user is a sham,” said the FTC’s Ashe.
The person with a low credit score is not truly an authorized user; they can’t charge anything on the card. So they would be artificially raising a score, not accurately reflecting their creditworthiness and actual ability to pay their bills, if it worked, he said.
And it doesn’t always work in someone’s favor.
FICO has known about such shenanigans and long ago took steps to make sure that nefarious authorized user accounts would not have any or much impact on your credit score, Ulzheimer said.
Regular authorized user accounts — say between a parent and a child — would still have an impact, he said.
In general, consumers should limit authorized users on their credit cards to their family members or friends. And even then, Ulzheimer said, a significantly higher credit score isn’t guaranteed as a result for someone with less-than-perfect credit or a younger consumer with little credit history.
“It’s not going to turn FICO 500 into FICO 800,” Ulzheimer said.
Here’s a legitimate way to build credit
Ulzheimer said he built up his own credit history as a young man as an authorized user on his father’s credit card. And plenty of people do the same.
About 15% of consumers opened their earliest reported credit account with a co-borrower, according to June 2017 report called “Becoming Credit Visible” by the Consumer Financial Protection Bureau.
“The credit records of an additional 9.6% of consumers were created when the consumer became an authorized user on someone else’s credit account,” the report stated.
Such data would imply that about 1 in 4 consumers first acquire their credit history from an account for which others were also responsible. But such usage is less common in lower-income neighborhoods, the report said.
Beware of some credit tips on YouTube
Some pretty kooky claims are being made on YouTube these days, including videos on how consumers with great credit can make thousands of dollars just sitting around in an ugly recliner.
“I can actually make quite a bit of money every week by letting CreditCardCashFlow add people to my credit card,” says Charles from New York on one YouTube video.
The FTC complaint also pointed out that another brand in the group — CreditCardCashFlow — solicited consumers with long-standing, positive payment histories to add outsiders as authorized users to their accounts. The third party is not able to use the card to charge anything.
“Defendants offer to pay these account holders to add other consumers as authorized users to their accounts, including third parties who are not family members or otherwise in close personal relationship with the account holder,” the FTC complaint stated.
But someone with good credit could still be at risk if their information gets into the wrong hands and fraud is later involved. You’re also taking part in making false statements to lenders.
What are the signs of a scam?
As with most questionable deals, there are many red flags when it comes to fixing your credit. Here are some to watch:
- You’re asked to pay a fee upfront before any of your debts are settled. Or some outfits require that you pay fees masquerading as “contributions.” It’s illegal to require an upfront fee in order to fix your credit.
- The so-called credit repair company tries to look like an official government program.
- There are so-called guarantees to make the debt go away or improve your credit score.
- There are promises that the company can erase your bad credit or remove information from your credit reports.
“The chances credit repair companies can do anything you couldn’t do on your own are very unlikely,” said Laura Blankenship, director of marketing for the Better Business Bureau Serving Eastern Michigan and the Upper Peninsula.
One huge problem: It’s not uncommon that the person ends up paying a hefty fee to the credit repair company — and then many still have bad credit or owe money for old loans once the company is unable to deliver its promises.
“Before signing any contracts, it’s important to look at the success rate of the company and research reviews online,” Blankenship said.
You also have the right to cancel your contract with any credit repair organization for any reason within three business days from the date you signed it.
Remember, a credit repair organization cannot charge you until it has completed the promised services.
What are some real ways to fix your credit?
- Take time to rebuild your credit by paying bills on time, paying off debt and avoiding taking on new debt.
- Pay extra close attention to the limits on your credit cards and avoid charging more than 25% of the available line of credit on each card. This is true even if you pay off the bill each month.
- Get a free copy of your credit report to review — and if necessary, dispute any mistakes. See www.annualcreditreport.com.
- You can dispute inaccurate information on your own. You should not have to pay anyone to do this for you.
It’s also possible to get a co-signer with good credit on a car loan to get a lower interest rate. Or you may want to see if your landlord will report rent payments to credit bureaus.
Read or Share this story: https://www.freep.com/story/money/personal-finance/susan-tompor/2019/07/05/credit-repair-scam-send-money-now/1619672001/
How to Get Help with My Credit?
A low credit score does not only make loans costly or inaccessible. It may affect your employment, and even prevent you from renting the best apartment. As an indicator of creditworthiness, it is checked by lenders, insurers, employers, and landlords. If the total is far from perfect, there are several ways to fix it. The best repair companies will do it on your behalf.
Why Scores Go Down
In the US, the most popular scoring systems are FICO and VantageScore. They use a similar combination of factors to assess data on credit reports. Three major bureaus — TransUnion, Equifax, and Experian — document your payments and all events related to borrowing. For example, the three most important elements for FICO are:
- history of payments (35%);
- the total amount of debt (30%);
- age of credit history (15%).
From this, you can deduce the conditions for the best scores. You need to have an impeccable record without missed or late payments, and the total amount of debt should be as low as possible. The longer your history — the better. You may also raise the score by using more credit products (credit mix accounts for 10%) and opening new accounts (10%).
Do You Need Repair?
This term refers to the correction of official records. Today, affordable credit repair services help you clean the reports fast. These measures are not always necessary. The accuracy of the records determines whether you need repair. You may need to rebuild your history, not fix it. For example, you will see the credit score go up after paying debt.
Every year, you may request a copy of your reports. There is no need to contact the agencies individually. Until April 20, 2022, www.annualcreditreport.com allows you to get them for free once a week.
If the documents are accurate, there is nothing to fix. However, you may still raise the score by rebuilding your credit history. There are several ways to do this, such as:
- Increasing limits on credit cards or paying off the balances (this lowers the credit utilization ratio);
- Getting a new credit card (to bring down the same indicator);
- Taking out new loans and paying back diligently;
- Adding more data to your reports through Experian Boost, and more.
How Repair Works
Mistakes on official reports are not uncommon. You may find errors in spelling or completely false entries, such as judgments, evictions, or bankruptcies. These derogatories will tarnish your records for a long time. Most negative entries affect the score for 7 years, and some bankruptcies influence it for a decade, depending on the chapter.
Every consumer has a right to dispute such errors on their own. This is a challenging and lengthy process. Not only should you navigate consumer credit laws. It is necessary to liaise with bureaus, lenders, and collectors. Communication involves formal letters of specific formats. If you lack the expertise, a credit repair company is your best bet.
Overview of Professional Services
These providers have teams of weathered experts. They will collect your data, identify the most damaging mistakes and have them removed. This process involves four key stages and takes several months on average. The company will:
- collect your reports from all major bureaus;
- scrutinize the documents to identify inaccuracies;
- develop a strategy to fix the score as quickly as possible;
- collect evidence to prove that the items are false;
- send formal dispute letters to credit bureaus to have the mistakes deleted.
Most providers offer different tiers of services. The cheapest packages include five disputes per billing cycle on average. The core services are analysis and disputes. In addition, you may access score monitoring tools, personal budgeting apps, identity theft protection, and other extras.
On average, repair takes between 2 and 6 months. This depends on the number of mistakes you want to eradicate. The more derogatories — the longer you (or your hired experts) need to collect the evidence and initiate the disputes.
How to Find a Reliable Provider
In the United States, credit repair is a big industry. Dozens of companies offer to raise your total quickly, but choosing the right one is tricky. Pay attention to the following:
- reputation and BBB rating;
- range of services;
- money-back guarantee.
Your provider may or may not be accredited with the Better Business Bureau. Still, this platform offers crucial insights (e.g., the number of complaints in the past 3 years and any pending lawsuits). Feedback is also available on sites like www.consumeraffairs.com and TrustPilot. In addition, check expert reviews from reputable sources like Investopedia.
In terms of pricing, learn about the ‘first work fee’, or ‘setup fee’. It is paid upfront. Subsequently, the company will charge you every month as long as you need its services. On average, you may pay between $79 and $129 per cycle.
Pay close attention to the refund policy. Some companies will not return your money even if they fail to delete a single item from the records. At the same time, there are unconditional policies. These allow you to get a refund for any reason within the first 90 days.
You need convenient access to progress tracking. Most providers allow you to check the status of your case on their web portal. The biggest companies have proprietary apps. You may reach their office by phone on any weekday, and support is also available during shorter weekend hours.
If you need help with repair, choose trusted providers in your area. Check their reputation, legal status, and feedback from customers. Beware of scammers. With professional assistance, you may see the first results in just over a month.
La Reyna Del Credito Helping People Defeat the Financial System by Improving Their Credit Scores
Financial freedom is somewhat an alien word where Ivonne Arvizu comes from, and she made a solemn promise to make it happen for herself and as many others as possible. With a work rate that has cut across different clients with varying professions such as medicine, entertainment, business, legal, real estate, financial professionals, police officers, and thousands of other people who needed credit report at one time or the other, Ivonne Arvizu has created a strong impression about La Reyna Del Credito. Ivonne acquired her credit repair knowledge a long time before she established her credit repair company, and she started helping people fix their credit while she worked at a bank. The bank was against her offering such services due to a conflict of interest. Ivonne, not willing to let herself get tied down in some banking bureaucracy she didn’t agree with, resigned from the bank and made her company into a full-fledged, official credit repair business.
Ivonne Arvizu has always been about excellence and flying the flag high all her life. Despite coming from a humble background and a poor family that never fulfilled the American dream, Ivonne set out to make a difference. She became a homeowner at the age of 20 and has dedicated more than 18 years of her life helping the Latino community elevate its financial status. Ivonne has been featured in Spanish programs on television networks like Telemundo, Univision, Radio Nueva Vida, Radio Inspiracion, and other broadcast services educating the public about financial freedom. Through La Reyna Del Credito, Ivonne is changing lives and shaking things up in the financial world.
La Reyna Del Credito was established on the premise of “Life happens, and anyone can get into a bad credit situation.” In Ivonne’s words, “Nobody ever hopes to have bad credit. It just happens, and it does not discriminate. There are so many variables that cause people to have bad credit and fortunately for them, ‘La Reyna del Credito’ exists.” Beyond fixing bad credit scores, La Reyna Del Credito helps people get their mortgage credit within days so they can buy their dream homes without stress. The company established a FICO program that ensures this guarantee, and it has boosted La Reyna Del Credito’s credibility in the Latino community.
La Reyna Del Credito has proven to be a game-changer for the Latino community and has pushed its members to focus on becoming more financially stable in their retirement age. With more than 1,087 real estate deals closed in 2018 alone and a money-back guarantee on all credit fixes if the company does not deliver the score, La Reyna Del Credito has given people more confidence in its services as it continues to deliver excellent results. The bulk of the company’s clients are Spanish-speaking Latinos who migrated to the United States without knowledge of how credit scores work, and they need guidance. Ivonne Arvizu has built something outstanding, and she’s willing to see it through till she has fixed the finances of hundreds of thousands of people.
Learn more about La Reyna Del Credito on the company’s official website.
Improve Your Credit Score with a Credit Repair Company
Securing a loan for your home or business investment can turn out to be quite overwhelming for individuals and businesses out there. People with poor credit scores often struggle with their loan applications, as it gets a bit challenging to have your loan application approved at a low interest. In fact, a credit score happens to be the first thing a bank or a financial institution is likely to notice when reviewing your loan application.
Sometimes, simple things such as late payments and irregular bill payments can lower your credit score significantly. Even if you manage to find a private lender who’s willing to approve your loan application, there is a good chance they will charge you a high interest for the loan.
Why Do I Need to Hire a Credit Repair Company?
It isn’t always your utility bills or debt payments that lower your credit rankings, but sometimes, you might end up with a bad credit score because of a small error on your credit report. Regardless of the complexity of the issue you are facing, you can’t deal with the problem on your own. It is important that you seek help from a credit repair company to look into the matter and fix the issue quickly. As the name suggests, the credit repair company is in charge of fixing the errors in your credit report and removing the items that might be lowering your credit score. This includes charge-offs, late payments, liens, debt collections, and so on.
With a large number of credit repairing companies claiming to offer high-quality and cost-effective services, the decision of choosing the most reliable company could be a little overwhelming. Each company offers a set of unique services that are designed to improve your credit score in different ways. You might have to apply for a loan to finance emergency health requirements, your dream home, a startup, business capital, child’s education, and other requirements. Here are a few other reasons why you must hire a credit repair company:
· Fix Inaccuracies on Your Credit Reports
Research shows that more than half the population of the United States report inaccuracies and unnecessary errors in their credit reports every year. These errors occur due to the miscalculation is wrong information. As mentioned earlier, it isn’t always your debts and late payments that affect your credit rankings.
Sometimes, small errors in the report could have a profound impact on your credit score. It is, therefore, important for businesses and individuals to get their credit reports reviewed once in a while. Only a credit repair company has the expertise and skills it requires for reviewing the credit reports thoroughly and fixing the errors. The sooner you get these errors fixed, the faster you will be able to apply for a home loan.
· Job Opportunities
Many reputable companies ask applicants to attach a copy of their credit reports with the job application so that they know their staff is trustworthy. A good credit score increases your chances of getting hired by a reputable company.
· Insurance Policies
You can’t secure the best and low-priced insurance policy with a bad credit score. It’s important to work on your credit score to get the best deals on insurance policies. That’s because a majority of insurance providers offer insurance plans based on your credit reports. A reliable credit repair company will help fix your credit score, saving you a significant amount of money on an insurance policy.
Best Credit Repair Companies
There is no denying that good credit repair companies can help improve your credit reports by erasing the negative items and fixing the inaccuracies. Here are a few popular credit repair companies you can count on for premium services.
· Credit Saint: With more than 10 years of experience in this industry, Credit Saint tops our list of the best credit repair company. The Better Business Bureau has rated it A+ for the variety of services it offers. The company has undoubtedly improved the credit rating of a large number of customers successfully over the past few years. It reviews your FICO credit score, evaluates the negative items, and fixes the damaged credit score.
· Sky Blue Credit: If the price and quality of the services are your main concerns, Sky Blue Credit is your best bet. The company has kept a fixed price, which is $79 a month, for an extensive range of credit repair services.
· The Credit Pros: With over 200,000 customers based across different parts of the world, The Credit Pros is a 12-year old company that has received an A+ rating from the Better Business Bureau. You can enroll in its monthly plan that costs a flat fee of $49 or choose the prosperity package – whatever fits your preference and budget.
- Bad Credit1 year ago
All you Need To Know about Bad Credit Scores in 2020
- News10 months ago
Financial Complaints Soared During Pandemic, Reports Say
- Bad Credit12 months ago
The General Car Insurance Review 2020
- Credit Repair Companies1 year ago
How to improve your credit score
- Bad Credit1 year ago
How to Get an SBA Coronavirus Disaster Loan
- Bad Credit1 year ago
Bad Credit? Best Bad Credit Mortgage Refinance Companies • Benzinga
- News1 year ago
Global Credit Repair Services Market Demand and Status, Forecast 2025 | • CreditRepair.com • MyCreditGroup • The Credit People • Veracity Credit Consultants • TransUnion • MSI Credit Solutions • Lexington Law • USA Credit Repair
- Bad Credit1 year ago
Bad Credit Payday Loans Online