Credit Repair or Credit Reaper? How to Tell the Difference


Unless you have been sleeping for the last 5 years, you know that our country (along with a lot of the world) is in a financial bind. Of course, if you didn’t know it already, the credit repair ads on the television and Internet probably gave you some kind of clue. The problem for many consumers is credit. Bad credit can dramatically impair your ability to make investments and progress your financial state.

But with so much noise on the topic, how do you organize your thoughts? Lexington Law lists four initial questions most people ask themselves when attempting to repair their credit:

  • What affects my credit score?
  • What’s in my credit report?
  • Do the credit companies have to share my information with bureaus?
  • Is it only about credit bureaus?

Unfortunately, not all credit repair companies are good. A lot of them can hurt you rather than help you. I’ve done some research and found useful information on credit repair companies that I’m sure you’ll find useful.

Know Your Enemy

Before you can repair your credit, you want to know your enemy. No, this isn’t the credit card company who gave you the card. These are the scammers that are out there after your money. So let’s look at the things that scammers do to scam you.

Signs it’s a Scam

There are 5 signs that you are dealing with a scammer:

  1. Insists on payment before work is done
  2. Say that you shouldn’t directly contact the credit reporting company
  3. Says that you should dispute credit report information, even when you know it’s right
  4. Says that you should falsify information on loan or credit applications
  5. Does not explain your rights legally when they’re telling you what they’ll do

One of the common things that fraudulent companies will do is to run ads that promise to give you a new or fresh credit identity. These companies say that they will help you with hiding bankruptcy or bad credit if you pay them.  These companies provide you with numbers that are similar to your SSN. This is often referred to as a CPN, which stands for credit privacy or profile number.

Another thing they might tell you to do is to apply for an EIN. This stands for Employee Identification Number. The difference between the CPN and the EIN is that an EIN is legitimate. They’re generally used by a business to report to the SSA and the IRS. However, EIN’s can’t be substituted for your SSN.

Many times a credit repair company will tell you to use these numbers for applying for credit instead of your SSN, and they’ll claim it’s legal. However, it’s just a scam. It’s possible the companies are selling SSN’s that are stolen. When you use a stolen SSN, you’re involved with identity theft.

If you follow the advice of the company and you have committed fraud, you may be in a lot of trouble legally. It’s a crime to:

  • Falsify information on a loan or credit application
  • Misrepresent your SSN
  • Use false pretenses to get an EIN.

The sad truth is that if you are using the number you’ve been sold, you may be facing hefty fines or even prison time.

How to increase your credit score

So, now that you know about the scammers, what can you do to help yourself repair your credit? There are a number of things that you can do to help your score increase.

  • Get your reports — Before you can help your credit, you have to know what is on your report. So you want to ask the credit bureaus for copies of your reports. You are entitled to a copy from each bureau each year.
  • Dispute errors – If you see any legitimate errors on your reports, make sure that you dispute the errors. Make sure you write the bureau and let them know what the error is. This can raise your credit score, depending on the error.
  • Stop using credit cards – Credit cards are likely what got you into this mess in the first place, so stop using them. Every time you use your credit card, it’s going to lower your score.
  • Pay off the balances that are past due – Paying off your balances that you are behind on can help you with increasing your score. Also, contact your credit card companies and see whether or not they might be willing to work with you.
  • Don’t apply for new cards – Every time you apply for a credit card, it’s going to count against your score. So avoid doing this at all costs.
  • Don’t close open accounts – Even though you may think this is a good choice, this is one of the worst things you can do. Leave accounts open if they have balances.
  • Get professional help – If you find that you are too deeply in debt to take care of it yourself, it’s best to get some professional help from a legitimate company.

Tips for Finding the Right Person to Help with Credit Repair

If you have gotten to this point, you are ready to get professional help with repairing your credit. So here are some tips on how to find someone to help you.

  • Ask People you Trust – If you know of someone that has had trouble with credit, they may be able to point you to the person they worked with.
  • Ask Your Lawyer – If you have legal counsel for another reason, asking them for a recommendation on where to turn for repairing your credit may be a good idea.
  • Look Online – This should be a last resort, but you can look online to find someone to help you. If you find someone online that can give you help, make sure you read the information about their services and how they work.

Choosing someone to help you with credit repair can be very daunting, but there are many legitimate companies who are there and ready to help. These companies have helped millions of Americans with their credit repair problems. I recommend looking for businesses that provide visitors with free credit consultations.

*image source: Sean MacEntee via photopin cc

About the Author

Jenna is a freelance blogger who is most often writing about finance and savings, especially for families. In her spare time Jenna is usually reading, riding her bike, or working on some wacky DIY project!



  1. 1

    Great advice Jenna. The credit repair industry is still unfortunately rife with credit repair scams. As you point out you need to do your research and investigate any credit repair agency you are considering thoroughly before signing up to make sure you avoid a “credit reaper”.

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