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How Can I Tell If A Credit Repair Company Is A Scam?

How Can I Tell If A Credit Repair Company Is A Scam?

When poor financial decisions catch up to you, it can be tempting to look for quick fixes. After all, a low credit score can cost you sometimes thousands of dollars over time in high-interest fees, application fees, and so on. And a recent report from the Federal Trade Commission revealed that 1 in 5 consumers had a mistake on their credit report, from no fault of their own. Many consumers turn to credit repair companies to resolve issues and improve their credit scores. The problem is that some of these companies operate unethically and illegally, asking for big sums of money upfront and promising outrageous results. So how can you tell the scams from the good guys? Credit Repair Scams Preying on the vulnerable is one of the most common forms of criminal behavior, and it’s the name of the game when it comes to fraudulent credit repair. It’s so common, in fact, that the federal government created the Credit Repair Organization Act (CROA), enforced by the Federal Trade Commission, to protect consumers from credit repair scams. So how can you tell if an offer is only a scam? Here are some red flags to watch out for: They charge an upfront fee. This is illegal, and you should never pay for a service until it has been performed according to your contract. They only accept cash. This means the “company” is trying to be untraceable, and is a huge warning sign. They offer you a “new identity.” Usually this means they give you a special “code” that you are instructed to use instead of your social security number. In...
How Does Taking Out a Mortgage Affect Your Credit Score?

How Does Taking Out a Mortgage Affect Your Credit Score?

One of the top reasons to maintain a good credit score is because it can help you secure a low interest rate on a home mortgage. In fact, a poor credit score can even disqualify you from a mortgage. But if you somehow manage to do get a home loan with a poor credit score, you’ll likely pay thousands of dollars extra in interest payments than if you had a better score. Home ownership is still central to the American dream and a big goal for most people. It is also usually the largest loan an individual will have in their entire lifetime. Being approved for a mortgage and also securing a low interest rate all depends on your credit score and history at the time of application. If you are approved for a mortgage, it is generally agreed upon that you are considered a trustworthy borrower, otherwise why would the lending institution take a chance on you at all? But once you have been approved for a mortgage and moved into your new home, what happens to your credit after you’ve signed on the dotted line?  Expect an Initial Drop The process for taking out a mortgage is similar to taking out a car loan or other form of financing and impacts your credit in similar ways. First, the lenders will take out a hard inquiry on your credit to get a thorough look at your history. This hard inquiry will ding your credit a few points, but not significantly. It’s important to note that if you shop around for mortgages, multiple inquiries will only appear as a single...
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