BBB's Tips for People Considering Debt Relief or Credit Repair

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People struggling with debt or seeking to fix their credit score often turn to credit relief companies. And some of these companies make big promises, but then don’t deliver, leaving people further in debt.

Debt is not inherently bad, but many people find themselves underwater as monthly payments and interest stack up, leading them to seek help from a credit repair company. While some people report positive experiences with the credit and debt assistance industry, others reported that expensive fees and lackluster results left them worse off than before.

A new BBB study found a pattern of high fees and overstated promises from predatory companies in the debt relief, debt consolidation and credit repair industries. BBB has over 11 thousand complaints and a thousand negative reviews about debt and credit assistance that reveal a pattern of misleading and sometimes fraudulent claims.

If you’re thinking of contacting a credit relief company, BBB recommends caution and thorough research to make sure you’re working with a reputable company and not putting yourself at risk for a scam.

You should also keep in mind that many of the services offered by credit and debt assistance companies are things you can do yourself. Here are some key terms and services to know about when researching options.

Tips for people considering debt relief or credit repair:

• Use AnnualCreditReport.com to get a free credit report.

• Don’t pay or provide payment information to any company until service is rendered.

• Critically examine any guarantee made. Few, if any, companies can ensure that a credit or debt company will agree to negotiate with them or adjust reports.

• If you are in default, call debt holders yourself and attempt to negotiate a lower debt payment.

• Check monthly bank statements to avoid recurring charges from companies.

• Search online for free information.

• Don’t give in to pressure. Unscrupulous businesses and scammers both use high-pressure tactics to try to rush a decision.

• Avoid giving away personal banking information until you are 100% certain a company is legitimate.

• Refuse to work with companies that won’t tell you your rights when it comes to credit repair or debt relief.

• Be wary of anyone claiming to be associated with a government agency.

Where to report a scam:

• Better Business Bureau or BBB Scam Tracker

• Federal Trade Commission (FTC) or call 877-FTC-Help

• Find your state’s Attorney General online