Credit Repair Scams to Avoid

Credit repair scams only dig a bigger hole for you to bury yourself in. Find a reliable credit repair company that will sincerely help you clamber out of your debt.

If you have a poor credit rating, you should considering using credit repair services in order to improve your score.

However, as demand for credit repair services have increased, a number of credit repair scams have also cropped up. You should be aware of these scams so that you do not get taken in when trying to improve your credit score.

Scam 1: Debt Repayment

There are a number of unscrupulous credit repair companies out there who claim they will help you to repair your credit. However, all they do is simply arrange for a debt repayment with your bank, or take on another non-confirming loan in your name to repay other outstanding debts. This method does not work because Australia is one of the few countries in the world with a negative credit reporting system – this means that only negative things, such as missed or late repayments are actually reported on your credit file, not positive events like repaying your debt. So taking on a debt repayment scheme will actually not help you to improve your credit rating.

Scam 2: Borrowing More Money

Certain credit repair scams out there will encourage consumers to take on more debt. For instance, a few companies encourage customers to take on a small loan, or a new credit card, in order to indicate that they are actually credit worthy. However, this does not work in Australia due to the nature of credit reporting here. Because only negative things are reported, taking on additional debt (even if it is something you can repay easily) will not actually help you repair your credit

Scam 3 – Credit Repair Software

There are a number of software out there that claim to improve your credit score. These are actually not credit repair scams per se, because these software do actually work for some people who live in the United States. However, such software does not work for Australians and has no impact on Australian credit reports. So if you live in Australia, you should definitely avoid these software.

The only way to really repair your credit in Australia is to go through your report and dispute any inaccurate things that are reported in your file. Once these inaccuracies are reported, the creditor who reported the inaccurate information will have to remove their report – this in turn will reduce the number of negative statements in your report and thus your credit score will improve. This is where a good credit repair company can come in, since they can help you to really improve your credit score.

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