With the economy slowing and access to credit becoming less available, many people are looking for fast, easy ways to fix or even erase damage to credit history.
Better Business Bureau is warning that some companies are using the credit crunch to take advantage of consumers who want to clean up their credit.
JPM Accelerated Services, Inc. based in
The company asked for $895 for services up front and additional information to create a "debt profile," which the consumer described as providing information to list all credit cards and personal information. Giving out this information could put the person at risk of ID theft and financial loss.
Mutual Consolidated Savings is another credit repair firm based in
Be aware of the following about credit repair companies:
Ads are not always truthful. Be wary of advertisements promising to "fix" bad credit. Credit repair companies may claim to improve consumers’ poor credit ratings, but, in reality, no credit repairer has the power to change or erase accurate information in a consumer’s file.
Watch out for temporary fixes. Credit repair companies may dispute credit reports on your behalf, but that may only temporarily improve your credit rating. Learn what the credit repair company can offer and have them put it in writing prior to giving up your credit card information.
Upfront Fees. Watch out for companies that say they’ll "fix" bad credit for a fee — often substantial, usually payable in advance.
Removing negative information from your report. So-called credit repair companies say they will arrange to have negative credit information removed from your record — including information about bankruptcies and default judgments. No credit repair company has the authority to have negative information removed from a consumer report unless it is inaccurate, or the rule in the act requires that the information be removed.
Prior to working with a company:
· Look at what you can do on your own for free:
§ Reduce your monthly debt payments (excluding mortgage payments) to no more than 15 – 20 percent of your take–home pay.
§ Use your bank account properly – overdrafts and NSFs can signal financial difficulty.
· Consult with the Credit Counselling Society to see if there are things you can do to help your credit www.nomoredebts.org
· If you want to use a credit repair service check company's history on www.bbb.org
Contact www.phonebusters.com if you think you have been involved in a fraud.