New scheme targets those looking to repair credit

U.S. & World

(NBC) – Scammers are targeting the millions of Americans in debt, especially millennials. They have the poorest credit scores of any generation, according to Experian.

“There’s no magic wand, the best way to repair your credit is to pay all your bills on time and then wait,” said Katherine Hutt with the Better Business Bureau.

But fraudsters are taking advantage of those desperate for a quick fix, promising to relieve debt or improve credit for an upfront fee.

Companies are required by federal law to provide a written contract detailing the services it will provide and can’t collect a dime until those services are completed.

“Anyone trying to collect an advance fee is not a legit credit repair organization,” Hutt said. 

The Better Business Bureau scam tracker received more than 740 reports of debt relief and credit repair scams in 2018.

Those scams cost consumers hundreds of thousands of dollars.

“A credit repair organization can’t really do anything that you couldn’t do on your own,” Hutt said.

Here’s what to do if your credit score needs help:

– Contact creditors and negotiate for a lower rate or lower monthly payments.

– Consolidate debts into a single loan payment.

– Get help from a certified debt or credit counselor.

“A credit counselor will help you budget help you come up with payment plan and really teach you money management skills,” Hutt said.

Those are skills to help get in the black and stay on track.

If you believe you’ve been targeted by a scammer report it to the Federal Trade Commission and the Better Business Bureau scam tracker at BBB.org/scamtracker.

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