Scammers will contact you promising a specific credit score or a reduction or total elimination of your debt as long as you pay an upfront fee. You pay the fee, and nothing changes except that you are now out money that you could have put towards the debt you owe.
Avoid Upfront Fees for Credit Repair
Under the Credit Repair Organizations Act (CROA), it is illegal for credit repair companies to charge an upfront fee. Be cautious of any service that asks for payment before providing assistance. Reliable services will only charge you after they’ve achieved results.
Be Wary of “Guaranteed” Credit Scores or Debt Reduction
Scammers will often claim they can guarantee a certain credit score or eliminate debt. Legitimate credit repair and debt relief companies cannot guarantee specific outcomes, so treat any such promises as a red flag.
Research Any Company Offering Credit Repair or Debt Relief
Look up the company’s name online along with terms like “scam” or “complaint.” Check their credibility through trusted sources like the Better Business Bureau (BBB) or your state’s consumer protection office.
Contact Creditors Directly for Assistance
Instead of paying a third party, consider speaking directly with your creditors or a reputable nonprofit credit counseling agency. Many creditors offer hardship programs or can negotiate payment plans directly.
Know Your Rights and Consider Free Alternatives
Federal law allows you to dispute errors on your credit report for free, without a third party. You can also check your credit reports free at AnnualCreditReport.com. Reputable organizations like the National Foundation for Credit Counseling (NFCC) offer free or low-cost help.
Don’t Share Personal Information Over the Phone or Online
Scammers may ask for sensitive information like your Social Security number, banking details, or other personal data to access your accounts. Always verify a company’s legitimacy before sharing any details.
Report Suspicious Activity
If you’ve been contacted by a suspicious company, report it to the Federal Trade Commission (FTC) or your state’s consumer protection office. Reporting helps to prevent these scams from affecting others.
Federal Trade Commission (FTC) Credit Repair Guide
Provides information on legitimate credit repair practices and details your rights under federal law.
AnnualCreditReport.com
Allows you to access your credit report from all three credit bureaus once per year for free, which can help you keep an eye on any inaccuracies you can dispute on your own.
Consumer Financial Protection Bureau (CFPB)
Offers guides on avoiding debt relief scams, knowing your rights, and accessing free or low-cost debt relief alternatives.
National Foundation for Credit Counseling (NFCC)
The NFCC provides nonprofit credit counseling, budget assistance, and debt management programs that help seniors and consumers avoid scam debt relief programs.
Better Business Bureau (BBB)
Check BBB reviews and complaints for any credit repair or debt relief company you’re considering to see if they have a history of fraud or complaints.
