More Scam Artists Trying To Take YOUR Money.

I don’t know about you, but I’m stretching my pennies these days. I’m squeezing every nickel until Ole’ George hollers. A lot of you are in the same boat. Times are tight right now – people losing their homes, a gallon of gas heading for $4 with a gallon of milk costing even more, auto sales slumping, advertisers cutting their budgets, everybody doing what it takes to get through this little gulley in the financial roadway of life.

But it seems every time I turn around there’s somebody else trying to get their hand into my pocket – like there’s anything of interest in there. We’ve talked about the mortgage fraud scams that have rocked the Valley, and the foreclosure scams and reverse mortgage scams and the identity theft scams – well here’s one that’s been around for awhile but is really starting to take off again due to the problems folks have had keeping up with their budget the past couple years – the credit repair scam.

You see the ads in newspapers, on TV, you hear them on the radio, you get postcards in your mail – everywhere you turn – offers to ‘repair your credit’. Every day thousands of people type ‘credit repair’ into Google, hoping for the promised cure:

• We can erase your bad credit – 100% guaranteed
• Remove bankruptcies, liens & bad loans from your credit forever
• Create a new credit identity - LEGALLY
  

For a fee, these companies offer to clean up your credit report so you can get a car loan, a better mortgage rate or even a job. The problem is, they can’t deliver. After paying them hundreds or thousands of dollars to improve your credit, most simply disappear back under their rock with your hard earned cash.

Having said that, there are legitimate credit counseling services out there, some non-profit and some for-profit, and they work by the book to guide you through your credit nightmare – but it’s a time consuming and intensive process and does not – CAN NOT – happen overnight. So if you decide to respond to one of a credit repair offer, here’s a few things to look out for:

• Companies that want you to pay for all, or part, of their service up-front. Credit repair services can’t ask for payment until they’ve kept their promises. Federal law also requires credit repair services to give you a explanation of your legal rights, a detailed written contract, and three days to cancel.

• Companies that recommend you not contact a credit reporting company yourself. Why? You might find you can do many of the things for free that they are offering for a fee and you might also find out some of the things they promise are illegal.

• <!--[if !supportLists]--><!--[endif]-->Companies that offer you a ‘new’ credit identity, build a clean report from scratch.

• <!--[if !supportLists]--><!--[endif]-->Companies that advise you they will dispute all derogatory information on your credit report until it’s removed.

These last two constitute most of the scam element because they sound so do-able. Create a new credit identity and your old problems will disappear. The company will provide you a new number that looks like a Social Security Number (for a fee). Now understand that only in the rarest of circumstances will the Social Security Administration issue a new number so what most of these numbers are is called an Employer Identification Number, or EIN. Looks and acts like an SSN, works a lot different.

First off, it’s gonna mess up the IRS. They’re going to see two numbers on you but only one return and they’ll get curious. You don’t want that. Assuming you make it past them, wait until you try to collect your retirement and Social Security Benefits that were collected under the old number. But hey, you’ll be retired by then with plenty time to deal with those fraud charges. Finally, don’t you think a mortgage broker or auto dealer is going to think something’s up when you waltz through their door at 45 years of age with a brand new sparkling credit report and no history? Don’t fall for the new identity scam.

How about disputing all your derog’s? Absolutely – that is something you should do. You can even do it yourself for free. By law you are entitled to a free credit report once a year from the three reporting agencies. Simply go to https://www.annualcreditreport.com/ and sign up. Your reports can be mailed or downloaded on-line and if you see something wrong on the report, inaccurate information, debts you know nothing about, that sort of thing, you can dispute the item to the company. By law they have 30 days to investigate and if they can’t get corroboration for the item, it will be removed. Usually while an item is under investigation it will be removed from the report until it is verified.

HOWEVER, what the scammers will do is file dispute after dispute after dispute which will temporarily remove the item from your report. But if the item is valid, if you made a payment late, if you had a bankruptcy, if it’s legitimate, it will be back. All valid credit items stay on your record for 7 years even if you pay off and close the account. BK’s stay around for 10 years and nothing, nor nobody, can remove negative information if it’s accurate. Honest. And these repeated disputes eventually tick off Experian and Equifax to the point where they won’t even respond to legitimate inquires you might have. It’s not worth it.

Remember – if something sounds too good to be true… well you know the rest. Unfortunately there’s a sucker born every minute and two grifters to take advantage of him. A word to the wise is sufficient – a wink’s as good as a nod to a blind horse.