Equifax

Finance Blog

How to Protect Yourself from Credit-Repair Scams

Written by Equifax Experts on November 15, 2010 in Credit  |   3 comments

How to Protect Yourself from Credit-Repair ScamsEquifax Credit TeamIf you’re drowning in debt, you might be tempted to partner with a debt-relief service or a credit-repair company to help you pay down your debt. In recent years, some companies have preyed on consumers’ financial insecurities,…

How to Protect Yourself from Credit-Repair Scams
Equifax Credit Team
If you’re drowning in debt, you might be tempted to partner with a debt-relief service or a credit-repair company to help you pay down your debt. In recent years, some companies have preyed on consumers’ financial insecurities, prompting the federal government to get involved by passing new laws regulating the industry.

Credit-repair companies promise to restructure your debt or settle with creditors on your behalf to change the amount you owe. They may also offer budget counseling or classes, or create a debt-management plan for you.

New Federal Trade Commission regulations require that these companies be clearer with customers about what they can do, how long it will take, and how much the customer may or may not save.

The FTC regulations also make it illegal for such companies to charge a fee before they are successful in helping a customer with his or her debt.

Keep in mind that these rules apply only to companies offering services by phone or over the Internet. If you meet with a company face-to-face before signing up, these new rules do not apply.

How Can You Protect Yourself?

Before you get involved with a credit-repair company, ask your state attorney general or Better Business Bureau if any complaints have been filed against the company.

You can also check with your state attorney general’s office to see if the company has a valid license. Remember: just because a company claims to be a nonprofit organization, it doesn’t mean it is.

A reputable credit counseling agency should provide you information without requiring you to provide money or details about your situation. The company should tell you your rights and what you can do for yourself for free.

Ask how the company will handle your sensitive financial information to make sure it stays private.

Finally, be sure it is clear how much you are expected to pay the company, and get that number in writing.

Credit-Repair Scam Red Flags

Be cautious if the credit-repair company

  • Asks for money before offering any services. If the company asks for money up front, just walk away.
  • Makes guarantees and promises that seem too good to be true. No one can correct inaccuracies on your credit report or make your debt disappear over night.
  • Tells you it can change information on your credit report. A credit-reporting company can help you remove inaccurate information from your credit report. But it cannot change the truth on your report, so be wary if a company says it can.
  • Requires payment of monthly service fees or of a substantial percentage of the money you save.
  • Tells you to pay the company instead of making direct payments to your creditors.
  • Asks you to apply for an employer identification number (EIN) to use instead of your Social Security number. You can’t invent a new credit identity. If the company asks you to do this, walk away.

To file a complaint or ask questions, visit ftc.gov, or call toll-free at 1-877-FTC-HELP.

3 comments

  1. Doreen says:

    what do you do if you have dealt with this type of company? I gave them $1,000 and they did nothing and now won't answer my calls

  2. Editor, Equifax Personal Finance Blog says:

    Hi Doreen, thanks for commenting on the blog. If you think you've been a victim of a scam, you may want to consider contacting the Federal Trade Commission to file a complaint: https://www.ftccomplaintassistant.gov/

    –Editor, Equifax Personal Finance Blog

  3. Larry says:

    I had spoken to each collection agency and they agreed to a reduced amount and I paid it all off. I have a letter from each agency stating that the balance is now paid. How can I repair my credit with Equifax?


Leave a Comment


Name :


Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.


Credit Archive

Stay Informed Sign up for our FREE Equifax email Newsletter