Common Credit Scams to Watch out For
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Common Credit Scams to Watch out For

Written by John Ulzheimer

There’s no shortage of scam artists who would love to trick and manipulate you into handing over your hard earned money. If you’re currently facing the unfortunate problem of bad credit then you should be especially careful.

The stress and frustration brought about by bad credit can make you feel desperate for relief, which can make you more vulnerable to falling for a “quick fix” credit scam.
To be fair, every company claiming to be able to help you improve your credit is not a scammer. The idea that there are no legitimate, professional services available to assist you with your credit problems is dead wrong.

In fact, there are many credit counseling programs and even some reputable credit repair companies that may be able to genuinely assist you, as long as your expectations are realistic and you don’t expect anyone to wave a magic wand over your credit problems.

However, there are many fraudsters as well. Take a few minutes to review the following 3 common credit scams so that you can protect yourself and your loved ones from becoming one of their victims:

1. Credit “Repair” Scams

All credit repair companies are not scams and, contrary to popular belief, their services are not illegal. There are legitimate companies that can help you to dispute inaccurate or questionable items appearing on your credit reports.

It’s worth noting that even with the legitimate credit repair companies, you’ll still be paying a fee for something you could do yourself at no cost. Of course the same can be said of cutting your hair, repairing your car, or preparing your own taxes. It’s ultimately up to you to decide if you want to try to tackle credit-reporting errors on your own or hire a someone to assist you.

Warning Signs: All legitimate credit repair companies will comply with the requirements set forth in the Credit Repair Organizations Act (CROA). You should be VERY wary of any credit repair company that

  • Requires you to make a payment before they do any work on your behalf
  • Does not inform you of your rights including the right to dispute items on your credit yourself
  • Makes outlandish promises (like claiming they can delete everything from your credit reports)

About the author

John Ulzheimer

17 Comments

  • I want to know more about these credit bureaus are they a scam and do they have a board of directors and how do you sue them

  • I can’t thank you enough for all the information you have supplied. Do you also tell people how to get the interest rate lowered so the stupid card can be paid off?

  • About 12 years ago I was contacted by my bank Capital one concerning a credit repair company ,which was looking for more clients, they came through a vetted sponser the local chamber of commerce ,my credit looked like the titanic after it split in two…so what the heck I,ll give it a try,had a meeting in real fancy new multi story building in McKinney tx, the man I met with seemed professional and swore on his mothers grave they could improve my score,said it would take a little time but not to worry patting me on the back ,I enquired about the cost, he said they would call after they made an estimate, this was on a thursday…the following monday the slick speaking rep came by my business in rowlett tx( Dallas suburb) to give me the good news they were on track to improve my lot, also picking up a ck for 2,720 dollars ,not a small sum for a tiny company, the summary is nothing ever happened,after 6mths I contacted my bank officer who had reccomended this king rat in the first place,she was concerned,contacted the rat, ordered him to meet with me a 3rd time which he did, I think he was afraid the bank might make waves for him so he met with me just to extend time on his behalf, by the way went back to the original fancy offices they were all for lease looked like they had never been used. Big clue to this is and its been mentioned on this site before…..If someone comes to you for cash payment for any reason its a con no matter where it comes from. p.s I,m sure the rats mother is still alive, she probably abandoned him when he was a baby for taking to much milk!

  • I just dropped 150 points because someone else opened a credit karma account using a previous married name that I petitioned the court to be rid of. Everything I did was legal.TU said they would remove the other names. Now they’re using the name I had removed! This happened the same day I called about a fraud concern since someone had my S.S. income showing on my report, I was concerned. and now deny it! Only 3 days my score went from 700 to 555.
    I faxed all documents required. I now have Fraud Alert on my files. I have less TRUST for the credit report agencies! Am I destroyed again? It was expensive and hard to remove after ID theft!!

  • I had a finance company that I hadn’t used in 9 years do a hard credit inquiry on me cutting my score over 3 points. Is this legal? I contacted trans union & they said I would have to get the finance co. that did this to send them a letter giving permission to take it off. Lol. That’s bull crap. I think the credit bureau crock is just that, a crock of crap. I paid a loan off early & they lowered my score.Its all a big rip off.

  • The company you recommend regularly on your blog charges 179.00 up front then 99.00 after ….. Since they are asking for money upfront are they a scam also.

  • You used to speak highly of a company that claimed to be able to do this kind of work. On the strength of your word I contacted them. I DID NOT like their practices upon speaking to them on the phone. They seemed VERY shady. They made all types of promises about wiping EVERYTHING that was negative on my credit reports off. I told them I could do it myself. I did, and now my credit score is 742!!!!!!! THANKYOU for ALL your help. There should be more people like you!!!!!!!

  • I like reading your articles please keep them coming. Please send me information that could help fix my credit report

    • The only way to fix your credit. 1) Pay bills on time, every month. 2) Get a copy of your credit report at least once a year, and make sure there are no misreported negatives on it. If there are contact the vendor, or the reporting agencies to get them removed. 3) Don’t carry large amounts of revolving credit. If you use a credit card pay it off every month, if you can. If you can’t, don’t use your credit card, unless its a dire emergency. In other words Live Within Your Means. If you want to buy something expensive, save up for it first. Don’t charge things just because you have plastic. There’s nothing worse than buying something and by the time its paid for, its already sitting in a landfill. 4) Read Mike Roberts’ e-mails and follow his advice. Good luck.

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