How to avoid a credit repair scam

CreditMagnifying glass

From the time we get our first job to when we get our hands on our first credit card, we are constantly informed of the importance of maintaining a strong credit rating. In Canada, just like many other countries throughout the world, people with good credit are more likely to obtain financing for a car loan, mortgage, insurance or another big-ticket expense than individuals with poor credit.

Credit can be a needed boost, but it can also be debilitating. Learning how to protect yourself from becoming a victim of fraudulent activities is one way to keep your credit score and report in strong standing.

Several companies make the bulk of their money by targeting poor-credit consumers with promises to clean up their credit report. A promise many hurting consumers will believe because they need assistance to qualify for a new home or expense. But in most cases, the companies cannot deliver on their promise, leaving the consumer with more debt and in a worse hole than when he or she started the process.

No credit repair company has the authority to remove negative, but accurate, information from a credit report, regardless of it promises. Consumers should do their own research into the credit repair process and learn the inner workings of their credit reports and scores to avoid becoming a victim of a credit repair scheme.

Unfortunately, consumers who do take part in these illegal activities, sometimes unknowingly, can find themselves in legal trouble along with the company.

There are effective legal ways to improve your credit score, they just take time. The key is keeping your score high after it's recovered. Doing so may enable you to qualify for more affordable mortgage rates and car financing plans, providing you even greater financial freedom. 

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