Credit Repair Scams Hurt Homebuyers

Credit repair scams are nothing new, but prospective home buyers have to be particularly aware of the risks of dealing with these predatory agencies. As a general rule: if it sounds to good to be true, it probably is.

Interest rates have held near record lows for much of the last half-decade, and credit repair companies tout their services to potential borrowers looking to increase their credit score to qualify for a home loan.

In reality, there is no secret weapon anyone can use to magically fix their credit score. It takes time to build up a history of on-time payments and responsible borrowing to truly raise a credit score.

Some red flags that let you know a credit repair company is a scam:

  1. Exaggerated claims about results.
  2. Upfront payments before services rendered.
  3. Using illegal tactics.
  4. E-mails or phone calls that are make to look like they came from a government agency.

The FTC has charged over 35 credit repair businesses with making bogus claims and/or cheating consumers out of money. Avoid these credit repair scams by staying alert and aware of exaggerated claims, and follow your gut if something seems off.

It will generally take 7-10 years to completely fix your credit history after going through a bankruptcy or period of missed or late payments. Once your credit score is better, work with a bank and a quality real estate agent to figure out what home you really can afford.

Read the entire story at AOL Real Estate.

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