Beware ‘credit repair’ agencies that target Hawaii consumers

Scams

If you are planning to buy a house, lease a car or even get a new job, your credit score matters.

Scammers know this and they make a living preying on those desperate to improve their score.

Lately, Better Business Bureau’s Scam Tracker has received numerous reports from consumers targeted by credit repair schemes.

Here’s how it works. You get a phone call or see an ad for a company that claims it can quickly repair your credit. The offer grabs your attention. Your poor credit rating has been holding you back, so you decide to give it a try.

You contact the company and they promise to remove past credit mistakes, such as late payments or a bankruptcy, from your credit report. They may even offer to give you a new “credit identity.”

Don’t fall for it, warns Gregory Dunn, president of the Better Business Bureau serving Hawaii.

“Both of these techniques are schemes. These kinds of credit repair companies may persuade you to contest accurate information on your credit report. Others urge you to apply for a new ID number (typically one used by businesses for tax purposes) or provide you with a stolen Social Security number and tell you to apply for the loan with the new number. Misrepresenting yourself like this is illegal,” said Dunn.

Not all businesses promising to help you repair bad credit are fraudulent.

Watch out for the following warning signs:

  • You are asked to pay in advance. In the U.S., credit repair companies can only collect their fee after they perform the services promised.
  • The company promises to remove negative information from your credit report. If the information is accurate, no one can remove it.
  • You are urged to get a new “credit identity.” In the U.S., some questionable companies will ask you to apply for an Employer Identification Number instead of using your Social Security number. Misrepresenting your SSN is a crime.
  • Beware of contract red flags. Make sure you sign a contract and that it contains the terms of your agreement, including the price, the time period and the services to be performed.

“We receive approximately six to seven reports a month from local consumers who have been taken advantage of by one of these ‘repair agencies,'” Dunn said.

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