Beware Credit "Fixing"

We have heard from different areas of the country about credit "repair" clinics that promise to clear up bad credit records so that people will qualify to borrow money from financial institutions.

This is one more scam that is being pulled on our customers.

This latest scam, however, has a new twist.

The credit "fixer" will tell people they only have to pay if their bad information is really removed from the credit report. They'll show them the credit report with the bad information on it.

Then they appeal the bad information.

By law, the negative information must be removed from the credit report while it is being investigated. The repair clinic runs your next month's report, and "Voila!", the bad information has been removed. The customer at this point pays up their fee, which can range anywhere from $300 to $900.

Sometime in the future that customer applies for a mortgage or loan and...guess what?

The negative information is back on the credit report-and the customer is out the amount of the "fixing".

You might want to caution customers about quick-credit-fix scams. They don't work.

Copyright © 1994 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 1, 8/94