How to spot a credit repair scam

PHILADELPHIA (CBS) — Now that the economy is starting to improve, many Americans are hoping to clean up their finances, pay down debt and improve a credit score. But 3 On Your Side Consumer Reporter Jim Donovan warns, you better do your homework first!

From buying a car to buying a home, your past financial decisions are all laid out for lenders to see in a credit report.

With many aspects of the American economy on the upswing, many consumers are seeking to clean up their credit history and some scammers see that as an opportunity.

According to the Federal Trade Commission, there are a few easy ways to spot a credit repair scam:
First, if the company asks for payment before they render any services.

Also, if they ask you not contact the credit reporting agencies directly.

And, if they suggest giving false information when applying for a mortgage or a loan.

Another troubling trend among credit repair scammers, is the promise of an entirely new credit identity, which can unwittingly land a consumer in trouble with the law.

Consumers can spot these when a credit repair service suggests abandoning a Social Security number as a primary source of identification, and instead using a new number they assign and call a “CPN” for “credit privacy number,” or “credit profile number.”

In many cases, these numbers are stolen Social Security numbers, often from children, which is why they have a clean credit slate. Using those numbers can turn a consumer into an unknowing identity thief, despite their good financial intentions.

But first things first. In order to repair your credit you need to know what your credit report looks like. Every 12 months you’re entitled to receive a free copy of your report from each of the 3 major credit reporting bureaus. Just log on to to obtain yours.