��KY����

When you’re trying to clean up a troubled credit history and raise your credit score, turning to unethical credit repair services could cost you in time, stress and legal fees. Here’s how to spot a scam.

By now, you’ve probably noticed that your credit score comes into play whenever you’re making a major financial move, such as applying for a mortgage, buying a new car, signing up for a new credit card or even renting a home. With a low credit score, you might have a hard time getting approved for any large loan or purchase. That can make the idea of quickly repairing your credit very alluring.��

However, while there are legitimate organizations that can help you fix errors in your credit report, many bad actors advertise credit repair services to defraud customers. They may charge excessive fees, overpromise results or use illegal means to remove accurate information that has negatively impacted your credit. These companies could leave you in a worse position than you were in when you started.

To steer clear of credit repair scams, it helps to understand how they work — and what you can change on your credit report in the first place.��

What are credit repair company scams?

A credit repair scam usually starts with an online ad, or a notice in the mail, for a company offering to “fix” your credit score. These companies will often ask for a fee up front — and once you’ve paid it, you’ll never hear from them again. A scammer may also request your Social Security number, which they can then sell. Some scams will offer you a fresh start with a new Social Security number. If you use a Social Security number other than your own when applying for a loan or line of credit, you could end up facing steep fines.

Can you even repair credit?��

Credit reports can contain errors, such as negative marks that appear more than once, debt payments incorrectly counted as late or delinquencies belonging to another person with a similar name. Any of these mistakes can be disputed and removed, either by you or a service acting on your behalf. If you have been a victim of fraud, such as an impostor making charges in your name, you may be able to keep any resulting delinquencies from hurting your credit.��

However, negative marks that are accurate, such as a personal bankruptcy, may remain on your credit report for seven to 10 years. No matter what a credit repair service promises, there are no legal means to erase negative marks early.��

Can credit repair services dispute errors for you?��

You can contact credit reporting agencies to flag or dispute inaccuracies. What legitimate credit repair services offer is convenience and expertise when you don’t have the time or inclination to advocate for yourself. They have no specialized powers beyond understanding the system of disputing and resolving credit reporting errors.��

7 signs a credit repair service might be a scam

Here are some warning signs that an offer for credit repair could be a scam:

• Sharing few details about the plan. Under federal law, a credit repair service must follow clear guidelines for doing business. When you seek out help with your credit, you should expect a detailed, up-front explanation of the steps they’ll take and what you’ll pay, as well as prompt answers to any questions you may have. Credit repair services must also explain your legal rights and give you three days to cancel for no charge. Treat any lack of transparency as a red flag.��

• Demanding advance payment. Some legitimate services may request an initial setup fee, but pressure to pay in advance can be a bad sign. By law, credit repair companies can’t request upfront payments before they’ve completed the promised work. The suggests this simple rule: “Don’t pay upfront.” A request for unusual methods of payment, such as cryptocurrency, is another warning sign.��

• Encouraging you to dispute everything. A responsible service will acknowledge there is no way to eliminate truthful information that dings your credit.��

• Recommending you falsify information. Scammers may suggest you claim that any negative information is the result of identity theft or make other false claims about your credit history. Doing so can result in financial penalties or legal jeopardy.��

• Creating an alternate identity. If a service suggests creating a “credit privacy number (CPN),” under which you can build a credit history separate from your existing one, watch out. Unlike your Social Security number, CPNs are not issued by the government. Using one on a credit application may be considered fraud. They also may be stolen Social Security numbers issued to other citizens.��

• Using another person’s credit to improve your own. Scammers may claim you can become an authorized user of another person’s credit card. Known as credit piggybacking, this scheme is potentially illegal, especially when it involves paying a fee to be added to a stranger’s account and you later apply for credit based on an artificially inflated score.��

• Lacking an online presence. A quick online search of the company advertising credit repair services can be telling. Even if it has a website that appears legit, check the  or your state’s attorney general’s office for a history of complaints or enforcement actions. 

How can you legitimately repair your credit?

There are various ways you can improve your credit over time. Educate yourself on what goes into a credit score and address each component when and where you can. Paying bills on time and building a plan to pay back credit card debt is a great place to start.��

Once you’re out of debt, keep your credit utilization low. If the amount of debt you’re dealing with is overwhelming, consider consolidating your debt. 

While you can dispute errors, improving a poor credit score requires time and planning whether you engage a credit repair service or do the work yourself. Staying clear of services that promise quick fixes will keep you and your money safe.  

��

Find more resources on establishing credit to build your history and be ready for credit when you need it.