Common Credit Repair Scams
You will see there are a lot of Credit Repair companies, all offering similar services but at different rates and results. You should take the time to understand what is legal and what is not. We note a few common scams below.
File Segregation Schemes
A file segregation scheme is when a company or individual offers to give you an Employee Identification Number (EIN) to use in place of your Social Security Number when you apply for credit. It’s illegal for companies to do this, and it’s illegal for consumers to obtain one to use in place of their Social Security Number.
Credit Privacy Numbers
Like an EIN, a Credit Privacy Number (CPN) is created by scammers to use in place of your Social Security Number when applying for credit. Simply put, a CPN is a fake Social Security Number. Usually, these are created using somebody else’s identity, and using one can be considered identity theft and is a federal crime.
Tradeline renting is when you pay for authorized user status so that the tradeline shows up on your credit reports to improve your score. This doesn’t repair any negative information on your credit, but adding a positive tradeline to your credit report can boost your score. While this isn’t necessarily illegal, it can get you into trouble. There is nothing wrong with a loved one adding you as an authorized user. However, if you pay to “rent” a tradeline from a stranger, you don’t know how it will impact your credit and it may be a scam to get your money.
What to Do If You Are Scammed
There are a few things you can do if you realize you’ve fallen victim to a credit repair scam. Take a look at your options below.
- Report the organization to your state attorney general
- File a complaint with the Federal Trade Commission and the Better Business Bureau
- Consult with an attorney if you’d like to take further legal action
How to Safely Repair Your Credit
Making payments on time and disputing inaccurate or duplicate information on your credit reports can help you repair your credit. While you can do this on your own, US Allied Financial will make the process easier and more efficient. US Allied Financial proudly adheres to CROA to make sure we give our clients the best experience possible. We’ve helped clients challenge information that is unfair, inaccurate and unverifiable. Give us a call today so you can start on the path of better credit!