Tuesday, May 12, 2009

Avoiding Credit Scam

There have been many cases when Americans have ended up ruining their financial lives because of credit scams. Many people with a bad credit who are desperate to improve their credit scores are vulnerable and fall into the trap. One should always keep in mind a few points when deciding upon a credit repair organization.

“Consumer Credit File Rights Under State and Federal Law” provides you with knowledge about your right to get a credit report and dispute inaccuracies in the credit report. A copy of this law is given to every customer of the genuine credit repair organizations which are governed by the Credit Repair Organizations Act.

The legitimate credit repair organizations provide their customers with a copy of the contract before they are asked to sign it. The contract has the following details

1. The charges that apply for the services being availed to you.
2. The time required for the services to be performed
3. Name and Address of the organization.
4. A statement that says that the contract can be canceled within 3 days.

Fake credit repair organizations may ask for an advance payment either partial or complete. Many such fake organizations have also been reported to ask the customers to create a new identity and get a new Social Security Number or the Federal employer identification number (EIN). At times they also require you to sign a form that says that you are waiving your rights under the CROA.

However experts suggest that you start your credit repair stint yourself and that there is nothing that can’t be done on your own as there is legally nothing such organizations can do to improve your credit score. Disputing information is as easy for you as it is for the credit repair organizations. All you need to do is write to the credit bureaus about the inaccuracies present in your credit report and disputing the wrong information.

Before hiring any company to manage your credit or repair your credit
, you need to do make sure that you are not being scammed. You can do some research on the internet regarding the company concerned.

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