Jul 23, 2011
The only problems is, those programs don't work, and to add insult to injury, you'll find yourself paying hefty fees to those companies, only to end up right where you started, or worse. Sometimes, what is couched as a credit repair program may actually be an attempt to steal your identity by gaining information about your social security number, bank accounts, and credit cards.
Here's how the credit repair scam generally works:
First, the company will contact the various credit bureaus and tell them that the negative information contained in your files is false. Since they want to accurately reflect your credit information, the credit bureaus will temporarily remove the negative information while they investigate the claims. Meanwhile, the scammer sends you a copy of your credit file, showing that the negative information has been removed, claiming that your credit history has now been repaired.
It will seem like a miracle, until you learn that as soon as the credit bureaus have completed their investigation, any accurate negative information will be returned to your credit report, and you'll be back where you started, minus the fees that you paid to the scammer.
The key concept to remember when it comes to your credit report is that accurate entries will stay on that report for seven years from the time they're reported to the credit agencies. Bankruptcies stay on a report for fourteen years.
These types of operations usually buy up the names of financially troubled folks from two-bit mortgage brokers or financing companies (or offer them kickbacks). A lot of them seem to be hitting the fundamentalist crowd these days.