How to Protect Yourself from Credit Repair Scams

Tiana Clewis: Hey Dreamers, welcome back to my channel where we tackle all things money so you can use your money as a tool to create a life that you truly find worth living.

In this video, we're continuing our discussion started earlier this week about credit repair scams. With millions of people desperate to boost their credit score so they can do things like buy a home for their children, get a business loan, or simply buy a car, it's no surprise that there are thousands of people, thousands of companies out there taking advantage of folks with fake credit repair companies.

That's why on Wednesday, I broke down five of the most common credit repair scams that can leave you missing a huge chunk of money, leave you with a worse credit score than you had before, or even end up with you in handcuffs. To check out that video, click the card by my head, click the link in the description or wait until the very end of this video when the link pops back up on the screen.

If you're new to the channel, let me take a moment to say, Hi! Welcome! I'm Tiana B. Clewis and I'm a Financial Lifestyle Coach who's made it her business to help women entrepreneurs use money as a tool to escape the nine to five grind and build a life that they truly find worth living... something that I've been walking out each and every day since I quit my corporate career.

If you want to join me on this mission, like this video and subscribe to my channel below. Then hit the bell to make sure that you're notified when I drop new money tips and strategies each week that will help you hit your financial goals while still enjoying your life.

Now that the commercial break's over, let's do this.

Now, at this point, you've made the decision that you definitely want to go with a credit repair company, or at least you want to talk to one to see if it's a right fit for you. So you've Googled them. You're looking them up. You're reading through their website. Now there's some red flags you've got to look for before you even walk into their office, before you get off their website and get on the phone with them.

The first one is that they offer a guarantee, especially for a certain credit score or a certain increase. Okay I know this one seems a little crazy, a little wonky, and there are even some legitimate companies that do this foolishness only for them to later realize that they weren't supposed to be. See, there is a logical reason for this, and then there's also a legal reason for this.

The legal reason is that they're actually violating the Credit Repair Organization Act and that is an act designed to protect consumers by telling credit repair companies what they can and they cannot do. And what they cannot do is make a guarantee for a certain credit score or a certain increase.

Now, I think that comes just from - well, let's think about this logically. Okay? So if you've looked at videos that I've done in the past, talking about how credit scores are calculated, you know that this thing can get really complicated really fast.

There are multiple formulas out there for calculating a FICO score and a FICO is not the only type of credit score that even exists. Well, so let's say that at a minimum, there's 30 different formulas out there that can be used to calculate your credit score. If this credit repair company is going to promise you a certain credit score or a certain increase, one, they have to know which formula is being used by each organization. So if they are doing Experian and TransUnion and Equifax, which are the three main credit reporting bureaus - they have to know which FICO score they're using or if they're using the VantageScore.

You also have to know if, okay, maybe you're trying to, your mortgage broker is the one who's pulling it and they have like something else that they're using. That might have a different way of calculating the FICO score or the VantageScore or whatever score is being used by that particular brokerage company.

So if they sit here and they promise you a certain score or a certain increase, well who are they promising the score with? Is it with the Experian? Is it with this mortgage brokerage firm? Is it with this organization over here? Who are they promising that particular score or that particular increase for?

So they got to know which organization you're talking about. They have to know which formula they're using, which version of the formula they're using. Then they have to know the background information for your particular credit history and they have to know everything that's being calculated into your FICO score or your VantageScore or whatever credit score that is being increased, boosted. Then they have to have some sort of technology that they can use to plug any changes that they're going to make into the system to figure out what that score is going to increase to.

The reality is once you realize how complicated this gets, and it got really complicated really fast, it doesn't make sense. They can't make that promise. It's illogical. They don't know how high your credit score is going to go. They don't know how quickly they can bring your credit score up to that level, to that place.

So when they tell you that, I can guarantee you a certain credit score. They're lying. They don't know. They really cannot guarantee it.

So not only are they legally violating the Credit Repair Organizations Act, it's just not logical because credit scores are way too complicated for them to be able to make that sort of promise.

So there's your first red flag: they're guaranteeing a certain credit score or a certain increase.

The second red flag is that they claim this is something that you can't do on your own, and that's just a flat out lie.

There's nothing that can legally be done to improve your credit score that you cannot do by yourself. There's nothing, there's no information, there are no strategies out there that exist, that have not been put online for free or with some really cheap paid program. Every bit of information on how to improve your credit score is out there. Every strategy is out there. I bet you can find every single one just by looking at videos on YouTube.

You can find everything you need to know to boost your credit score by looking on YouTube, by doing simple Google searches, by reading Equifax's websites, by reading Credit Karma's website. It's all out there.

So when they tell you that you can't do this on your own, they're lying to you. Even the credit reporting bureaus will tell you, you can do this on your own. The Federal Trade Commission says, you can do this on your own. In fact, they encourage you to do it on your own.

So when you're getting a credit repair company, all you're doing is outsourcing something that maybe you just don't want to take the time to do that. You don't want to put the effort in doing on your own.

It's no different from when you get someone to clean your house instead of doing the cleaning for you. It's no different from when you have someone make your meal prep meals for you versus you doing the meal prep yourself on Sunday night. You're just outsourcing.

So if they tell you, you can't do this on your own, it's impossible. They're lying to you and I don't trust anyone who's gonna lie to you like that, okay? You can do this on your own. You're just outsourcing.

The third thing that you should look for before you ever get on the phone with them, before you ever walk into their office is to make sure that they're registered with the Secretary of State in the state that they are currently located in.

A lot of these companies will take clients around the country because literally they don't have to be sitting in front of you to repair your credit. So many of these companies have clients in like Tennessee and in California, even though they might be based in Texas.

A number of the different states actually have additional requirements beyond just popping up and saying, "Hey, I'm a credit repair company."

For example, and the state of Texas, you have to have something called a shorty bond if you're going to be a credit repair company - and a surety bond is basically just a really fancy kind of insurance. Well, in Texas, if that's required and you're going to get clients in the state of Texas - well, you can't really get a surety bond unless you are registered as a business when they Secretary of State somewhere.

So if they are not registered with the Secretary of States and they have the audacity to say that they can take clients anywhere in the country, that's simply not true. That means they're operating illegally, they're not following all the rules, and if they're not going to operate legally and they're not going to follow all the rules, you probably should not trust them. I'm just saying it.

Now if you make it past that research stage, you decided to try and work with a company, there are more red flags that you can catch during your initial conversations with the company.

The first red flag is that their strategy is to just dispute everything.

Now, let me admit that I once thought this was a very legitimate methodology. In fact, I even tried it years ago before Boyd and I got our finances in order, but thankfully we decided to stop and pursue another strategy. If you have actually tried this in the past where you just go and dispute everything, let me know in the comments by saying, "I tried it," because I know we are not the only ones.

But as I mentioned when we actually discussed various credit repair scams, disputing everything is actually an unethical and can be a fraudulent act, and it's a major red flag when you're employing a credit repair agency.

According to the Fair Credit Reporting Act, you can only dispute accounts that are false that are inaccurate, that are incomplete or that cannot be verified. And that verification loophole, as mentioned previously, is the loophole that they try to use to say, "Let's just dispute at all, because if they can't verify it, they don't have the original signature, they don't have the contract, they can't pull it up and produce it within 30 days, they have to take it off your credit report."

Okay. Yeah, that's technically true. But if you owed the debt and you dispute it, you've now just lied because you said this shouldn't be on my credit report when, actually it should because it's a legitimate debt. So it's an ethical and it's fraudulent, so don't do it.

Now, here's the thing though. That same strategy also violates the Credit Repair Organization Act, which is the act designed to protect us. I mentioned it earlier. They are not allowed to do that. The Credit Repair Organization Act says they're not allowed to just dispute everything.

So if you're talking to them and you ask their strategy and they say, we're going to dispute everything. Nope, they are okay with committing fraud. They're okay. We're breaking the law and they're okay with being unethical, and that is a major red flag.

Another red flag to look for is when their strategy is to give you a whole new Social Security Number or a whole new identity. Again, this is the illegal. 100% lilegal. Insanely illegal. The kind of illegal that's not going to end up with a fine, but like jail time type of illegal. So don't do it.

Also, this violates the Credit Repair Organization Act. Again, they're breaking the law in many ways and if you partner with them to do this, you're breaking the law too. So don't do it. If they say they're going to give you a new identity, if they say they're going to completely wipe the slate clean - which is impossible without giving you a new identity - Run! Just run.

Another one you can find in the initial discussions is that their strategy is a total secret. A complete and utter secret.

Why? Why is it a secret?

I've already told you that all you're doing at this point is you're outsourcing the work. You're outsourcing your credit repair. Everything that can possibly be done to improve your credit legally and ethically is online.

For free. It's out there, boo just go grab it. And so if they're telling you that their strategy is a complete secret, it's proprietary. You can't know. Okay, no, then they're full of crap. Like they're just full of foolishness. So if they say it's a complete secret, they're lying to you. Don't believe them. Run out the door.

Oh and one more. This one is kind of a bonus cause it's not originally on my list. It's just something that, um, when I'm doing - was doing my research and learning about some of these scams, it popped up. This isn't a scam. It's really about effectiveness.

So if they say that they do not work with improving your credit score with all three credit reporting agencies, then even though they technically might know what they do - what they're doing, and they might not actually be a scam: they're not going to be as effective as a company that does work with all three credit reporting agencies.

Think of it this way. If you, for example, are trying to buy a house, typically what's going to happen is the mortgage broker is going to pull your credit report from all three credit reporting agencies. And then they'll do something like they'll average it together, or they'll use the middle score, or they'll use the lowest score.

Well, if the company has only fixed one of your credit scores and the, so you've got that one that's like an 800 and then the other two are like, you know, 530 and 550, they're gonna throw out the 800 as an outlier, and they're going to look at the 530 and the 550. So basically you've wasted your money because only one of your credit scores has been fixed and they're going to make their decision based on all three.

So again, this is not a scam, but it's a red flag from an effectiveness standpoint. So if they only work with one or two of the credit reporting agencies isn't of all three of the major ones, they're not the right fit for you.

Finally, you have to keep your eyes peeled for some major disclosures that they are required to give you according to the Credit Repair Organization Act.

So there's three main ones that I want to point out. I want to reread the law because I remember only seeing three, but I want to make sure that there isn't more, but know that there's at least three that you need to know about.

One of them is that they have to provide you this big old, long paragraph statement that I was going to read, but I'm not going to read because it's long. And it's called the "Consumer Credit File Rights Under State and Federal Law" disclosure. And it's this big old paragraph. It'll probably take up like half a page. And they have to give it to you before you sign the contract.

So if you don't get that disclosure that says "Consumer Credit File Rights Under State and Federal Law," and it doesn't say explicitly what the Credit Repair Organization Act says, it has to say - and you can read the law to see what it's supposed to say - there's a problem. They're not following the law.

Also in the contract itself, somewhere near the end, uh, close to where you have to sign, there also needs to be a line that states, "You may cancel this contract without penalty or obligation at any time before midnight of the third business day after the date on which you signed the contract. See the attached notice of cancellation form for an explanation of this right."

Yeah, it has to be there verbatim. It has to be somewhere near where you sign the, uh, actual contract. So it's got to be somewhere near the end.

And then the third thing is they also have to have that Notice of Cancellation. It has to be attached. Again, the Notice of Cancellation has verbatim language that has to be on it.

So if you don't see these, these two disclosures or that line near the signature, there is a problem. They're not following the letter of the law, and if they're not going to follow the letter of the law, you need to run far, far away from that agency.

Okay. We've covered a lot, but hopefully you feel ready to spot an unethical or downright fraudulent credit repair company when you come across them now that we've gone through all these scams and all these different red flags.

That being said, I personally think that you are perfectly capable of repairing your credit yourself, and I encourage you to do so. Now, if you're struggling to see how you can make that happen, don't worry. I have got you covered.

Join me on a free 30 minute Rapid Strategy Consult to discover the actual steps that you can take to immediately get your money under control and to actually get your credit score heading in the right direction.

To snag your free consult, go to Click the book now button under Rapid Strategy Consult and set it up, get it going. And of course the link to get access to the rapper strategy console is going to be in the description below.

Now that you have my strategies in mind and a way to link up from our one-on-one help, let's get connected on social media. You can find me on Instagram and Twitter with the handle TianaBClewis or on Facebook with SelahFinancialCoaching.

Also, let me know that you found this video useful by hitting that thumbs up below and subscribing to my channel. Don't forget to hit the bell so that you're notified each week when I drop brand new videos.

Finally, if you're looking to learn more about your credit score, how is calculated and how you can get it to go up instead of down without being a victim of a credit repair scam, here are two more videos that you definitely need to be watching.

So you get to watching and I'm going to go. See you next week. Bye bye.

Check out my video on common credit repair scams that can leave you broke, with a worse credit score or even in handcuffs:

The Federal Trade Commission had created a summary of your rights under the Fair Credit Reporting Act (FCRA):

Read the Credit Repair Organizations Acts and the Consumer Credit File Rights Under State and Federal Law statement for yourself:

Are your finances so out of wack, that a credit repair company looks like your only hope? Don’t worry, I got you! Let’s chat one-on-one in your free Rapid Strategy Consult to uncover the right path to hitting your credit goals:

Get more tips and strategies on creating a stellar budget here:

#creditrepairscams #protectyourself #tianabclewis


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