They’re out there.
They’re waiting for you.
They say they want to help you. They say they can fix your less-than-perfect credit history.
What they really want is to rip you off.
First off, it is important to know that there are legitimate agencies that can help you get your financial situation back on track. I’ll talk about some of those later.
However, there are also a lot of agencies looking to help themselves to your cash. Here are a few things to remember:
- You should never pay an upfront fee for any type of credit counseling service. This is a major warning sign that they are up to no good.
- They must (by law) provide you with a copy of your rights as a consumer. This tells you what you may and may not do in regards to your credit history. If they do not provide this information, it is another warning sign.
- If your credit history has accurate negative information, it’s there to stay for seven years (ten for bankruptcy). There is no legal way to have it removed. Are they offering to delete records of a credit card you actually defaulted on? Warning sign.
- If there are mistakes on your report, know that you can correct them yourself for free. If an agency is trying to keep you from contacting a credit bureau yourself, that’s…you guessed it: a warning sign.
- It is illegal to try to create a new Social Security number or Employer Identification number for the purpose of creating a clean credit file. It doesn’t work, and it can get you into far worse trouble (we’re talking about the kind of trouble that could involve handcuffs and mugshots).
- Check out any credit reporting agency with the Better Business Bureau before you even consider using their services.
- The minute they use the term “piggybacking,” walk away. It doesn’t work. Warning sign.
- There are advertisements everywhere for credit repair services—email messages, on the radio, even on television. I’m just going to throw this out there: ignore them all. Maybe some of them are legit, but many are not. Do your own research and make your own decision. A flashy commercial that makes big promises is a definite (say it with me) warning sign.
- Legitimate credit counseling agencies are non-profit organizations. Every single one of them.
So…now that you know how to avoid a scam, where can you go for legitimate credit couseling?
REGIONAL Federal Credit Union works with Consumer Credit Counseling Services of Northwest Indiana (http://www.cccsnwi.org/), a non-profit agency. REGIONAL partners with CCCSNWI because they’re trustworthy, and they do exactly what a credit counseling service should do.
You can also find information about legitimate services nationwide from the National Foundation for Credit Counseling (http://www.nfcc.org/). They don’t work with scammers.
As always, before you use any credit counseling service, check them out with the Better Business Bureau (http://www.bbb.org). If they’re not BBB accredited, and if they don’t have a pretty spotless record, look elsewhere.
Personally, I’d never use an agency that had anything less than an “A+” rating.