There are no “quick fixes” to clean up your credit
June 24, 2019
by Lisa Lake, Consumer Education Specialist, FTC
If you’re trying to clean up your credit, you’ll come across plenty of companies offering an easy fix. But any company promising instant results for a price is likely a scam.
The FTC says Grand Teton is one of those companies. In its lawsuit, the FTC says Grand Teton tricked people into paying hundreds – even thousands – of dollars for so-called credit repair services.
Through websites, sales calls, convincing emails, and text messages, the company allegedly promised to boost credit scores by removing all negative items, among other things, from customers’ credit reports – and also boost scores by adding the customer as an authorized user on other people’s credit cards. But people who signed up with Grand Teton didn’t see a significant change in their credit scores, despite paying hefty (and illegal) up-front fees. And, if consumers complained or tried to get their money back from their bank, Grand Teton allegedly threatened to slap them with lawsuits.
Here’s the thing about credit repair: there’s rarely an instant fix. To clean up your credit and protect yourself from credit scams:
If you need help cleaning up your credit:
- Get a free copy of your credit report (from AnnualCreditReport.com). Review it carefully. Do you recognize all the accounts listed?
- If you find mistakes, contact the credit bureau and the business that reported the information. They must delete inaccurate or incomplete information. You don’t have to pay anyone to do this for you – you can dispute inaccurate items on your credit report yourself, for free. There’s nothing a company could do for you that you couldn’t do yourself.
- Only time can correct negative, accurate information on your credit report. You can rebuild your credit by paying your bills on time, paying off debt and not creating new debt.
Learn more about cleaning up your credit history. And, if you know about a credit repair scam, report it to the FTC.
- Contact a legitimate credit counseling organization. Good credit counselors review your whole financial situation before they make a plan. They won’t promise to fix all your problems or ask you to pay in advance.
- Learn how to spot a credit repair scam.
- ? Does the company ask for money up front?
- ? Did they say not to contact the credit bureaus yourself?
- ? Did they tell you to dispute accurate information on your credit report?
- If you said “yes” to any of those, stop right there. You’re probably dealing with a scam.
Turns out I'm not alone in recognizing that most used car dealers (not all, but most) are really just shady payday lenders disguised as merchants.
But I've been too optimistic!
Below is a quoted comment from an auto industry expert in the midwest. And this ins't me talking or another consumer attorney. This is a car industry guy talking - someone who helps dealers!
BHPH = "buy here, pay here" -- the classic small independent car lot.
He warns that even the big chain used car places have the same practices!
For used car dealers, the car is just the bait for the important part -- selling you an outrageous loan and optional "extras" that give the dealer much more profit than the car ever could. (Because, think about it -- the only reason 99% of the customers step onto the lot at one of these places is that they have such poor credit that they have to buy the car that someone else felt good about getting rid of.)
With the horrible increase in economic inequality in the US, this isn't going to change anytime soon.
But at least understand what you're dealing with -- if you feel like you have to buy a used car from a dealer, do everything possible to GET YOUR OWN FINANCING first, before you get anywhere within 100 miles of a dealer. Know what you are approved for IN TOTAL as well as in weekly or monthly payments, and walk away the minute the dealer tries to sell you financing.
Dealers are pushing out financing terms to absurd lengths to make used cars "affordable," but that just puts you into a negative equity trap (you owe much more than the car is worth) at trade-in time ... if the car even lasts long enough for a trade to be possible.
John Gear is a Salem attorney in solo practice