FAQs
Debt Relief Service and Credit Repair Scams
Some debt relief scams even tout their services using automated "robocalls" to consumers on the Do-Not-Call List. Auto loan modification scams falsely promise that they can reduce consumers' monthly car loan or lease payments to help them avoid repossession.
How do credit repair scams work? ›
Warning signs for credit repair scams include companies that ask you to pay before providing services. The company may claim that it can guarantee a specific increase in your credit score or get rid of negative credit information in your credit report, even though the information is accurate and current.
Is the debt relief program real? ›
Debt relief companies, sometimes called debt settlement companies, are one option for those struggling with credit card debt, tax debt, personal loan debt and other types of unsecured debt. These companies can help you manage certain types of debt, but they won't be the right solution for everyone.
Are debt relief programs bad for your credit? ›
Debt relief services may have a negative impact on your credit score, but that impact may not be as big as you think — and in some cases, it can help your credit. How these services impact your credit depends on the debt relief option you choose.
Do debt relief programs charge a fee? ›
Working with a debt management company can result in less debt or a faster payoff — but there are often hefty fees, often up to 25 percent of the debt enrolled, attached to the services. Working with a debt relief company often results in credit damage.
Is debt settlement a good idea? ›
Using debt settlement options to reduce debt comes with several risks, including late payments on your credit report, potential charge-offs, settlement company fees, tax implications on forgiven balances, possible scams and the overall risk of settlement offers not working.
What is illegal credit repair? ›
To understand what legal credit repair is, you need to understand illegal credit repair. Illegal: Altering your social security to improve your credit rating. Report to the authorities any credit repair company that encourages you to change your social security number or acquire a new security number under your name.
Can credit repair companies really fix your credit? ›
The Bottom Line
Legitimate credit repair companies can see to it that inaccurate information is removed from your credit reports so that it doesn't harm your credit score. However, they can't do anything for you that you couldn't do for yourself if you're willing to put in the time and effort.
Should I pay someone to repair my credit? ›
However tempting it may be to pay someone to undo damage, you are your own best resource. In short, no one can legally remove accurate and timely negative information from a credit report, and everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.
Is debt hardship relief legit? ›
A malicious scam has been surging lately, as reported by TNS' Robocall Protection team, targeting individuals who carry debt and are looking for a lifeline. Callers claiming to be from a 'financial hardship loan center' are attempting to steal victim's information or worse, digging them deeper into debt.
The short answer is Yes, people are generally allowed to use their credit cards after debt consolidation as it does not typically involve closing credit card accounts.
How to wipe credit card debt? ›
Outside of bankruptcy or debt settlement, there are really no other ways to completely wipe away credit card debt without paying. Making minimum payments and slowly chipping away at the balance is the norm for most people in debt, and that may be the best option in many situations.
How do I know if a debt relief company is legit? ›
They Ask for Fees Upfront
This is the most obvious sign of a debt relief scam. If the person/company offers to help get rid of your debt but first you have to pay them a fee, they're probably lying to you. Cut off contact and file a complaint with us.
How long to rebuild credit after debt settlement? ›
There is a high probability that you will be affected for a couple of months or even years after settling your debts. However, a debt settlement does not mean that your life needs to stop. You can begin rebuilding your credit score little by little. Your credit score will usually take between 6-24 months to improve.
What are the disadvantages of debt relief order? ›
Disadvantages of Debt Relief Orders
- There are tight income, asset and debt restrictions on who can apply for a DRO.
- If your circ*mstances change, you may still be required to repay your creditors.
- Your debt relief order will appear on your credit file for six years.
The California Mortgage Relief Program is provided as a free service by the CalHFA Homeowner Relief Corporation. There is no cost to apply, and you are not required to pay any fees, for any reason. The financial help you receive never has to be paid back.
Can accredited debt relief be trusted? ›
Accredited Debt Relief has an A+ rating from the Better Business Bureau, and it has a TrustScore of 4.9 out of five based on over 6,000 reviews with TrustPilot.
Are loan forgiveness programs real? ›
Public Service Loan Forgiveness (PSLF)
The PSLF Program forgives the remaining balance on your Direct Loan after you've made the equivalent of 120 qualifying monthly payments while working full time for a qualifying employer.
Are debt consolidation programs real? ›
A debt consolidation program can help by simplifying your bills and lowering your monthly payments. But even then, it can often be a stressful and time-consuming process that takes years to complete. There's no shortcut, but you can look for ways to save money and put the extra funds toward your bills.
