Your personal credit score is very important when you apply for a small business loan. A bad score usually means a higher rate, and it often means you won’t be able to get a loan at all. Because everyone is interested in their credit score, you are also susceptible to credit scams and identity theft.
Mitch Lipka, writing for FOX Business, recently published some very good advice to help you avoid credit score and credit report scams. Basically, there are no shortcuts to repairing a bad credit score, and you should be very wary of anyone claiming anything else. “The only thing that will move your credit history (and therefore your score) in the right direction is a combination of good behavior and time,” said Jean Chatzky, personal finance expert for NBC’s Today show.
“Typical credit-repair scams involve promises to remove negative information from your credit reports, or to create new, unblemished credit reports for you by using an employer ID number (EIN) or a CPN (the initials for made-up “credit profile number” or “credit privacy number”) instead of your Social Security number,” said Susan Grant, Director of Consumer Protection for the National Consumers League. “The hallmark of these scams, as with scams in general, is the request for payment upfront. In fact, it’s against federal law for anyone offering to repair your credit record to ask for payment before they have achieved what they promised you. And you must be given a written contract at the onset that describes the services, the cost, and any guarantee of success.”
The truth is, nobody can remove legitimate information from your credit report. The good news is, if there are mistakes, the credit bureaus want to fix them—it doesn’t do them any good to report inaccurate information to creditors. So don’t hesitate to make them aware of errors on your report. That’s not to say they won’t want you to document any errors you find with real evidence, but it’s worth the work of going through the process if it will help your report.
But remember, “The truth is that no one can remove negative information from your credit report, it’s illegal to obtain an EIN under false pretenses, a CPN doesn’t exist, and, if you are provided a stolen Social Security number to use, which sometimes happens, that could also land you in hot water,” said Grant.