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5 Tips for Avoiding Credit Repair Scams

5 Tips for Avoiding Credit Repair Scams

While we all would like to think that every agency and service that offers to provide credit counseling and repair was reputable, we all know that isn't the case. Just like in comparison shopping for a vehicle or getting a second opinion from a physician, consumers also must be vigilant to avoid incorrect information - even downright scams. There are many honest and reputable credit repair services at work throughout the nation. If you happen to get in contact with one of the dishonest credit repair providers, follow these steps to protect yourself:

- Take control of your finances: You might be seeking advice and counsel, but it doesn't mean you're surrendering your financial life to someone. Understand the proposals in front of you and speak up if you don't think the services promised were provided. Always find out up front what charges and fees you may be assessed by your credit repair counselor. Carefully review your financial situation and take the time to understand the proposal your credit repair counselor is offering. Will this solve your problem, or will you still have other credit issues? Remember that you are the client, not the other way around.

- If it's too good to be true... It probably is. If you receive a sales pitch instead of a thought-out action plan, consider that a warning. If you receive promises to increase your credit score to a certain number, or promises to erase data from your report, be extremely concerned. Only incorrect information can be deleted from a report - a promise that unflattering information will be removed could be fraud. If something sounds fishy to you, if a proposal seems too glowing, listen to the voice in your head and consider other options.

- Know your rights: Consumers have rights when it comes to their credit, so don't let a third party take advantage of you. Remember that you don't need to pay for credit mending services until they've been provided; in fact, your credit mending service must explain your legal rights to you. Receive all your contracts in writing, and always take time to carefully review them - preferably overnight.

- Be self-reliant: While legitimate credit-mending services are very helpful, particularly for those consumers who are having a credit crisis, not all consumers will need third-party intervention. Be wary of any company that tells you it has a special relationship with the credit bureaus that you do not. In fact, consumers can work to repair mistakes in credit reports on their own. Assistance provided by a third party can be particularly valuable when it comes to overall credit management and extensive repair of a credit record, but fixing a small error in a report can be done by the individual consumer.