Watch Out For Credit Scams

Added April 2, 2001 by Ilyce R. Glink

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Summary: Credit repair scams are easy to avoid - if you know what to watch out for. Avoid anyone promising an easy way out or something for a flat fee. It's most likely a scam, or something illegal.

Do you know how to avoid getting scammed?

Credit repair scams are easy to avoid - if you know what to watch out for.

Scam artists prey on the old, weak, poor, and those with poor credit -- typically those folks who're looking for the big cash windfall to save them from themselves. Unfortunately, a whole new crop of credit scams has been making its way across the U.S. Here's what to look out for.

One scam helps you establish a new credit history by applying for an employer identification number, also known as an EIN, from the IRS. An EIN has the same number of digits as a social security number. While EINs are legal for businesses, they're illegal for individuals to use. You can get new forms of credit, but the government will come after you for credit fraud.

Another common scam is the promise of a credit card or a loan - for a non-refundable upfront fee. If someone calls you and guarantees you a loan if you cough up between $100 to 7,000, just hang up.

The bottom line is that credit repair shops can't do anything for you that you can't do for yourself for free.

Published: Apr 2, 2001

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