If you are planning to buy a house, lease a car or even get a new job, your credit score matters. Scammers know this, and they make a living preying on those desperate to improve their score. Lately, BBB Scam Tracker has received numerous reports from consumers targeted by credit repair scams.
How the Scam Works:
You get a phone call or see an ad for a company that claims it can instantly repair your credit. The offer grabs your attention. Your poor credit rating has been holding you back, so you decide to give it a try.
You contact the company, and they promise to remove past credit mistakes, such as late payments or a bankruptcy, from your credit report. They may even offer to give you a new "credit identity." Don't fall for it!
Both of these techniques are scams. Scam credit repair companies may persuade you to contest accurate information on your credit report. Others urge you to apply for a new ID number (typically one used by businesses for tax purposes) or provide you with a stolen Social Security number and tell you to apply for the loan with the new number. Misrepresenting yourself like this is illegal.
How to Spot a Credit Repair Scam:
Not all businesses promising to help you repair bad credit are scams. Watch out for the following warning signs:
For More Information
To learn more, check out these tips from the Consumer Financial Protection Bureau. In Canada, check out the Ontario government's guide to credit reports and repair scams. To find out more about other scams, check out BBB Scam Stopper (bbb.org/scam).