Copyright (c) 2010 Suzy Vanstrusen

Consumers are being advised by the Federal Trade Commission (FTC) to avoid dealing with illegal credit repair companies when it comes to repairing their credit. One way of avoiding fraud and rip-offs is to know the signs if false credit repair agencies. What are these signs?

Upfront payment. A legal credit repair or credit counselling agency will never ask for an advanced payment prior to providing service since that is an infringement of the laws and regulations stipulated in the Credit Repair Organizations Act.

Advises you to lie or use false information. If your credit counselor recommends that you violate the law, then this is a sure sign that you are dealing with a fake agency. For example, you may be advised to use a different Social Security Number or replace your SSN with your EIN (Employer Identification Number) to switch your credit identity.

Keep in mind that lying or using false information just to be free from your all your responsibilities will never solve the problem instead, it will only worsen the situation you are in. In the long run, you will find yourself in an even deeper problem than you are in at this time. Furthermore, you can be charged and prosecuted for the crime of fraud.

Promises to instantly fix your credit history. If the debts in your credit report are correct, it is impossible for you or any of the three credit report agencies to remove those charges. In restoring your good credit history, paying your creditors is actually the only solution.

You are not told about your rights. A genuine credit counselor must first of all present to you your consumer rights based upon the Fair Credit Reporting Act (FCRA). Before signing up for a credit repair, you should be given a copy of the Consumer Credit File Rights Under State and Federal Law. Make sure that your agreement clearly stipulates the precise service you will be provided, the approximated time frame before you can see result, and all the fees that you are expected to pay.

You are not given practical advice. There are many steps which can be done to help yourself get out of bad credit without spending a cent. As an example, you are eligible to get a copy of free credit report if you think you have been a victim of fraud or ID theft; if you have been previously refused credit or employment; or if you are jobless but aiming to look for a new one within the next 60 days.

You can also obtain a copy of your free credit report by checking out www.annualcreditreport.com. The website is backed up by the three credit report agencies