Credit repair scams are unfortunately common and it is important to do your homework and research a company who makes claims they can repair and rebuild your credit score and reputation. Many people worry that filing for bankruptcy and taking advantage of the laws to help get a fresh financial start will cripple their credit forever. In many cases, bankruptcy filers are pleasantly surprised how easy it is to get a loan for a home or car, or get a new credit card within a number of months after a bankruptcy. When you have fewer active debt and collection liabilities, you are likely better able to pay your bills and be approved for credit. You might pay a higher interest rate on a loan, but the amount of debt discharged in a Chapter 7 or 13 bankruptcy makes the trade off worthwhile.
The Federal Trade Commission offers free information to help consumers spot and report credit repair scams. You’ll know you’re encountering credit repair fraud if a company:
- insists you pay them before they do any work on your behalf
- tells you not to contact the credit reporting companies directly
- tells you to dispute information in your credit report — even if you know it’s accurate
- tells you to give false information on your applications for credit or a loan
- doesn’t explain your legal rights when they tell you what they can do for you
Examples of recent credit scams and alerts to consumers to beware:
A court responded to the Federal Trade Commission request to stop the operations of First Time Credit Solutions, a credit repair company allegedly posing as an affiliate of the FTC when marketing to Spanish-speaking consumers. The complaint alleges marketing as “FTC Credit Solutions” and used a false affiliation with the federal agency to sell fraudulent credit repair services. The company guaranteed a 700 or higher credit score to its customers within six months or less.[i]
In another credit repair scam, a Florida company was fined $7.4 million by the FTC and ignored court orders to cease and desist from selling their illegal credit repair system. The owners of the company operated under several names: BFS Empowerment Financial Services, Inc., Help My Credit Now Credit Services, Inc., and Kevtrese Enterprises, Inc. These companies claimed they could permanently remove negative information on credit reports, even when the negative information was actually true and correct.
Joseph Wrobel, Ltd., can refer clients to reputable credit repair companies that do not make outrageous claims and make false or illegal promises.
A general rule applies to credit repair as it does in any business, if it seems too good to be true, it probably is. We have relationships with reputable credit repair companies who are especially helpful when you may have lingering negative information on your credit report about debts that were discharged in bankruptcy.
Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.
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[i] New America Media, Court Shuts Down Credit Repair “Scam” that Targeted Latinos, by George White, Apr. 114,2015.