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Consumers Warned About Credit Score Repair Scams

By Sally Maison
Published: Saturday, October 24th, 2009

FICO score, the most widely used scoring method worldwide, rang from 300 and 850. So where do Americans stack up? Based on average credit score by state, Texas takes bottom spot with 651 while South Dakota ranks highest at 710. Unfortunately, consumers must have a score of at least 720 before being considered a favorable borrower. Even Fannie Mae and Freddie Mac, government-sponsored enterprises which provide securities for homebuyers, set their lending bars at 720. With many consumers suffering from poor credit scores and longing for new loan opportunities, credit-repair scammers are rising in numbers once again.

Consumers Warned About Credit Score Repair ScamsConsumers Warned About Credit Score Repair ScamsThese companies lure homebuyers are mortgage applicants by promising to remove negative items on their accounts with the bureaus. They promise to fix credit reports in order to boost consumer scores which could help homebuyers get financing and even qualify for lower interest rates.

However, the Federal Trade Commission (FTC) just recently made two legal settlements suggesting that credit-repair companies only require clients to pay hugely for poor services. Both cases involve firms which promise consumers that they can remove any negative item on a consumer’s report. One firm even claimed that it will certainly be able to do so because of its inside contacts with lenders and credit bureaus.

Successful Credit Service Corporation allegedly promised that it could erase late payments, bankruptcies, tax liens, or any other negative items which adversely affect a consumer’s debt standing. The firm, based in Woodland Hills, California, gave a “100% guarantee” to further lure clients. It claimed that it has “priceless relationships we have with every creditor, collection company, public records provider and credit bureaus”, that would allow them to achieve promised results.

Its President, Tracy Ballard, often join real estate investment seminars all over the country which makes him obtain large number of clients. Once clients sign up for the firm’s services, they will be required to pay $3,000 to $4,000 straight up.

But FTC says the problem is that credit-repair agencies are prohibited by federal law from collecting fees unless they have fully performed the services they promised. It is likewise a violation if negative items being removed are accurate and up-to-date.

Unfortunately, Successful Credit Corporation almost always fails at fulfilling its promise. Clients even found it difficult to contact the firm when they inquire about their case. Those who ask for refunds because they did not get the services they were looking for were denied.
Neither Ballard nor any representative answered the claims by consumers.

Meanwhile, experts tell consumers to never pay for services they can do themselves. They explain that consumers can and should do credit-fix on their own.

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