Debt can be a ferocious beast, devouring your budget and destroying any chance you might have at financial wellness. Unfortunately, scammers know many folks would do almost anything to be debt-free, so they target these people with debt relief scams.
Here’s what you need to know about these scams and how to avoid them.
How the Scams Play Out
Debt relief scams use any or a combo of the following guises:
- A “debt repair” service that can greatly increase one’s credit score in no time
- Claims they can remove negative credit report info
- Promise to reduce credit card rates
The target, desperate to shed their debt, will pay any price for the promised outcomes. When the scammer fails to come through as promised, the consumer finds themselves even deeper in debt.
Red Flags
These red flags can help you identify a debt relief scam:
- A guarantee to bring your credit score up by a specific number of points within a short time.
- Promises to get rid of factual credit report information on your credit file.
- The service demands an up-front payment.
- Claims to be affiliated with a credit card company, but that company doesn’t recognize the service.
- The service tells you to cut off all communication with creditors.
The Do’s and Dont’s of Credit Repair
If you’re looking for a legitimate credit repair service, these tips can help.
Do:
- Research the service you consider using. Look for a secure site with a phone number and street address, as well as positive reviews from past clients.
- If the service claims to be affiliated with a credit card company, give the company a call to verify.
- Ask for a clear explanation of all fees and conditions.
Don’t:
- Never pay an upfront fee for a debt relief service.
- Don’t believe a service that guarantees to bring up your score by a certain amount in a specified timeframe.
- Don’t believe that a service can get rid of negative information on your credit file.
If you’re deep in debt, don’t despair. Let St. Paul Federal Credit Union help you find a solution to get out of debt. Call, click or stop by today to learn more about debt consolidation loans and other possible paths.