OnlyCritiques.com Review:

Credit scams are common because in desperate financial situations, people seek fast relief, and turn to companies that take advantage of their problems and promise credit repair or loan schemes, which are actually illegal. The most reliable way of clearing credit history is to seek the help of counselors who help in arranging realistic repayment plans.

Five kinds of credit scams have been determined that can leave the consumer in greater debt, destroy his good reputation and even send him to jail:

Alleged credit-repair companies claim that they can erase a consumer’s bad credit history, and instead create a new identity. They often charge large amounts of money for doing this illegal activity, and even swindle away the money without giving what they had promised. The Federal Trade Commission says that even if there are legitimate ways of clearing credit history, they are freely available to the consumers without intervention of these “companies.”

By inviting up-front fees or calls to “pay-per-call” numbers, some companies offer advance-loan schemes. They falsely guarantee the applicants a credit card or personal loan, even to those with bad credit histories. Many unscrupulous lenders aim consumers who have excellent credit, but have a not-so-good cash flow. They offer credit based on the equity of their homes, not on their income or their ability to repay. When the consumers do not have enough income to make the monthly payments, they end up losing their home.

File segregation, a relatively new scam, is used by credit-repair companies to obtain new taxpayer’s credentials or employer identification numbers from the Internal Revenue Service under fake pretenses and use them to segregate the credit files, and thereby hide the true credit identities of consumers from creditors.

These frauds can be avoided by trusting a counselor who can help consolidate debts and restructure payoffs in easy installments, and even reduce them up to 40-60%. In addition, to prevent identity thefts, one must keep his credit information or any personal information secure and confidential.

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