There are tens of thousands of people who currently have “less than perfect credit”. Typically, this phrase is a polite way of stating that an individual’s credit has been damaged. The ramifications of this financial condition can be quite extensive. It can be extremely difficult, and in some instances impossible, to obtain loans or lines of credit. Additionally, poor credit can negatively impact employment opportunities as well as the ability to rent or lease housing.

Although an individual’s credit can be restored over time, many people are eager to find a quick fix. As a result, con artists and disreputable companies have found plenty of targets for their credit repair scams.

Credit repair scams always revolve around the idea of providing an individual with good credit in a short amount of time. It is important to know that this is not possible! Only timely payments over a lengthy period will restore an individual’s damaged credit. In other words, as with most areas of life, there are no quick fixes. However, there are several variations of credit repair scams that would lead people to believe the contrary. Let’s examine each of these groups.

• The first category involves an illicit (or fictitious) company that has no intention of providing any service to the customer. They demand hundred or thousands of dollars in up-front fees in exchange for “guaranteed” results. However, once they have received payment, they disappear and are never heard from again. It is important to note that according to the Credit Repair Organizations Act, a repair company can not legally require a payment until they have fulfilled their stated purpose.
• The second category of scams involves companies who seemingly provide a service to their customers. They assist in disputing wrongful listings and taking a variety of appropriate actions. However, what they don’t tell the customers is that all of the services that they provide can be performed by the individual for absolutely free. Most individuals in this category end up paying big money because they believe that the required steps can only be handled by a professional.
• The last category of scams involves companies who provide illegal services to their customers. Typically this involves helping customers create “new credit”. This often involves applying for an Employee Identification Number, which is a business tax I.D. number. This number is then substituted for a Social Security Number to create the fresh credit. This practice is completely illegal. Customers who participate in this activity could be liable for prosecution.

It is possible to repair damaged credit. However, this is a lengthy process that requires discipline and hard work. Individuals should resist the urge to circumnavigate the system by hiring a credit repair specialist. More often than not, it will only lead to trouble.