Repairing Your Credit: Don’t Get Scammed

Americans spent years recovering from the recession and are now trying to purchase homes. Many face credit issues that have lowered their credit scores and some may be desperate to make them go away, but it’s important for consumers to know that there are untrustworthy people out there who may be looking to cash in on their credit issues. They’re running scams with the promise that they can raise credit scores. Some sound legit, but aren’t, and we don’t want you to fall for them.

If you’re being offered a deal where money exchanges hands in return for your credit score going up, chances are that it’s a scam. According to Housingwire and Freddie Mac, fraudsters have created schemes connected to the new FICO Score Open Access for Credit & Financial Counseling program. This program helps consumers learn about healthy credit management by providing their FICO score and a collection of educational materials. The fraudsters are contacting the consumers directly and offering to help them dispute defaulted debt in exchange for money. This is something that the average person can do on their own, but many find difficult. So, to offer help sounds almost legit, right? The consumers may even see their credit score go up, but it’s only temporary as the techniques they use rely on the creditor accidentally missing the dispute before the credit score is adjusted, which the creditor can always rectify later on. So, in the end, the consumer sees no real benefit from it.

Freddie Mac is warning consumers of another high-risk scam that most people will recognize as fraud right away. Criminals acting as credit counselors are encouraging consumers to falsely claim identity theft for past defaulted debt. In these instances, consumers have even gone as far as creating false documents to support their claims, but credit companies take such claims seriously and investigate them thoroughly. When they do, they discover the truth and the consumer is charged with fraud. All chances of getting that loan that drove them to desperation is squashed, not to mention the jail time and money they must pay out. The risk isn’t worth it.

Another big scam that Freddie Mac is warning consumers about involves credit privacy numbers (CPN), also known as credit profile numbers or credit protection numbers. CPNs are nine-digit identification numbers that can be used instead of a Social Security Number. They‘re assigned to celebrities, politicians, and people in witness protection, because the numbers can’t be traced back by the average person. Due to their exclusivity, most people don’t understand how they work and that has allowed for fraudsters to take advantage of consumers with bad credit. Basically, they sell CPNs with the promise that the consumer can create a whole new credit history based on that number. However, what they’re really doing is selling stolen social security numbers or CPNs that belong to real people, because CPNs have to be tied to a real social security number.

While recent statements from Freddie Mac don’t mention it, it’s also important to note that past scams similar to the CPNs have included the use of an Employer Identification Number (EIN). Anyone who doesn’t own a company may not be familiar with EINs. These are numbers used for identifying businesses and tracking their taxes. They can’t be used in place of social security numbers, but fraudsters have convinced people that they can be used to create a separate identity. It just isn’t true.

We fully understand how desperate and overwhelmed people can feel when it comes to their credit history, but there are better ways to improve a credit score. We know some knowledgeable, competent lenders that will take the time to advise you on the steps to take to clean up your credit and get approved for a home loan. It may take some time, but you’ll be protected from scams and “services” that will only make your credit harder to clean up. We are ALWAYS willing to help you out. Just give us a call or send us a message through our Contact page.

About the Author
Meghan Henderson
Meghan is the Marketing Specialist for The Cameron Team and a published author of two young adult books. She also creates digital and printable planners and trackers, as well as coloring pages for Larkspur & Tea.