Who among us can say they have found the credit repair company advertisements appealing? Their marketing makes many credit issues seem like they are simple to fix. They are the experts and we “need to call them now for a no obligation analysis.” While preying on desperate families attempting to save their home from foreclosure or “fix” poor credit, many often turn to these credit repair companies. Often these people assume they have no other choice than to pay exorbitant upfront fees. And of course, once you make those payments – never will you hear again from those “friendly customer service agents standing by”. More importantly, how can you even confirm these companies have completed the job as promised and resolved the credit issues effectively and accurately? In economic times where the unemployment rate is 9.1% and many more are struggling to keep up with their bills, credit repair companies have been booming and are quite profitable by preying on unsuspecting individuals.
Credit is a unique and ever evolving industry. The credit standards needed to qualify in today’s credit market is pretty clear, however correcting past derogatory credit lines is not. Pay your bills on time, don’t overuse credit, be careful not apply for too much credit….these are the standard rules that over time will provide a solid credit score. When problems occur and legitimate credit inaccuracies are discovered, the individual whose credit is affected can contact the credit bureaus themselves to fix these issues. Legitimate credit repair companies don’t accomplish anything to individual with credit issues can’t do themselves- and for free! Those who take the time and have the resolve can have the major credit bureaus (Experian, TransUnion, and Equifax) monitor and send emails when individuals apply for credit in their name. However, improving scores once errors are corrected actually takes time and people should always have the right expectations when undertaking such a task. Too often, these credit repair companies promise is to “erase,” for a fee….often up to $2000 for a derogatory credit item within 48 hours. These types of activity are clearly fraud. Such schemes have lead in part to individuals qualifying to buy homes under false pretenses, only to have the home lost in foreclosure soon thereafter. This affects the greater economy as a whole due to home price declines, reduced credit standards.
One company offers a free ID repair service when consumers find their identity has been stolen. The company is AllClear, which is Austin-based monitoring service by Debix, a data security company used by corporations and many government agencies in the US. The service, launched in April 2011 monitors identities through Internet surveillance of thousands of databases, including networks most often hacked by identity thieves. It also reports data breach attacks from companies instantly to its members. Children are also some of the most prevalent groups of identity fraud victims today as many are truly unaware of an issue for years until they become adults. Figures say around 10% of all children will be victims, according to Bo Holland, chief executive of AllClear. Fortunately, there are services offering its ChildScan product free to families. One of these services will scan the child's Social Security number and report on what it finds. You can find this offer here. The free monitoring service can be found here. Other (free) services to help you organize and set up repair your credit from the Federal Trade Commission here. Understanding the importance of credit, its limitations, and how to most effectively use it is a vital fact of life for the American consumer. No matter how dire the circumstance one finds them in it is never the answer to take costly and often illegal short cuts toward improving one’s credit. Start today with another free option by getting your free, federally mandated yearly credit report. This will be the first step for those looking at getting on top of their credit and correcting any misinformation. Informed, yet tough financial choices may be difficult to take today, but are vital to long term financial stability and happiness.
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