Don’t Pay for Credit Repair Scams
Is there a higher credit rating on your list of financial desires? Make sure you are not paying a scammer to get one.
The Federal Trade Commission has upheld a complaint against credit repair company BoostMyScore.net. This incident is a reminder that you should be suspicious of anyone who promises to dramatically improve your credit rating.
According to the complaint , the company charged people between $ 325 and $ 4,000, ensuring that it could improve their credit. He argued that he would do this by “shifting” consumers to other people’s credit cards – adding someone with bad credit as an authorized user for someone with good credit.
“Combining loans typically provides a credit boost of more than 100 points for BoostMyScore clients at major consumer credit agencies,” the company said in its promotional material, cited by the FTC. “In fact, the average client gets a raise of about 120 points in a month or two.”
The company has allowed people with high credit ratings to make money by renting out their authorized custom slots to people trying to raise their points.
In addition, this company is not in itself, because it was charging consumers an advance for credit repair services. It is illegal under the Credit Repair Organizations Act (CROA).
The credit repair company cannot charge you a service fee until it does what it promised. If it charges a monthly fee, the CFPB warns that it may be doing this to circumvent the CROA, but it is still illegal.
If you signed up for a loan recovery service, you have three business days to terminate the contract. This is true whether you are suspicious of his practice or simply change your mind.
While being an Authorized User is a legal way to build or improve your credit, doing it with someone whose finances you don’t know intimately (such as a family member) is a risky move. Paying someone to become an authorized user with a credit card, or getting someone to pay for it, is technically not illegal, it is usually considered a shady tactic.
If you are hoping to improve your rating by connecting to someone else’s credit card account, always do it with someone you trust to maintain a positive credit history. This person must have a longer credit history than your own if you are hoping to increase the average age of your account in order to gain growth.
And while you can see the increase in points by becoming an authorized user, no one can guarantee how much of this increase you can see.