If you are in debt trouble, promises of a clean slate can be tempting. Daily, credit repair companies across the nation try to lure in consumers with poor credit histories. These companies say they guarantee that they can erase your bad credit. Although, some may actually help their customers most are out for themselves. All they do is take the consumers money, falsely advertise their services, and in the end, leave the consumer with more debt than he/she originally started with.
The most common complaint from consumers is he/she paid for services in which they did not receive or were given no results. Credit repair companies imply they will work with your creditors to lower interest rates and to reduce your monthly payments. In reality they are not accomplishing their implied goal of doing so.
The second most common complaint is that these companies falsely advertise their services. In any given ad, it is implied that with their help, they can erase all negative remarks on your
credit report. The only two sources that can remove a bad debt from your credit report is the credit bureau or the creditor itself. The company might suggest that you apply for an Employer Identification Number which is very similar to a Social Security Number. By doing this he/she is able to apply for new credit because their negative remarks are not linked with the new number. This practice is considered illegal, therefore impossible for them to do this and for the consumer to get away with it.
In the end, after all is said and done, he/she is out whatever amount of money that he/she invested to help fix their debt. Repair companies do not tell the consumer that they do not put a hold on the cards so interest rates and other fees continue to be charged throughout the process. Let's say that a consumer has four credit cards with a balance of two thousand dollars on each for a total of eight thousand dollars. Pretending the interest rate on each of the cards is 19%, two months go by and now he/she owes an additional $1,520.00. Because of this you now owe more money than when you started with.
There is no particular reason that these things happen to consumers other than we tend to be vulnerable when in need. If someone with poor credit does choose to get help and not do it on his/her own, here are some helpful tips. Remember to always get arrangements in writing, verbal agreements will not prove to anyone that he/she has been scammed. Never send money first. Wait until after a service had been provided. Finally, use common sense before entering any arrangement with a credit repair company. If you feel like something might not be right, it probably isn't.
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