After filing for bankruptcy and successfully navigating through to a discharge, the first thing on most people’s minds is how to repair their damaged credit scores. Unfortunately, there are those around who will play on this and effectively scam you out of hundreds, if not thousands of dollars. The end result is that your credit score remains the same and you are left financially further behind. Here are five common scams that should be avoided.

  • Offers to wipe your credit history – Don’t even give these people a second look. It’s not possible to erase a credit history and lenders will not voluntarily remove any bad reports if you have gone through bankruptcy.
  • Offers to boost your credit score – Like wiping your credit history, your credit score is your credit score. They are minor things you may be able to do to boost it, but ultimately a third party cannot boost it significantly.
  • Credit impaired loans – There are some credit impaired loans that are good for you, however, you have to go over these with a magnifying glass. Some lenders will hit with high interest rates, very high fees, and very tight repayment conditions.  There is no need to pay these high fees.
  • Credit impaired credit cards - Like loans, there are good ones and bad ones. The bad ones will have high setup fees and high interest with a low credit limit. The really bad ones will apply the fees to the credit card balance effectively leaving you with no credit until these fees are paid. Along the way those fees are drawing high interest.
  • Secured credit with no reporting – These can be highly dangerous as they often have high fees, high interest, and require tight security, often from a non-credit impaired sponsor. The real downside to these loans is that there is no reporting to credit agencies.

Rather than being ripped off by scams, build a reasonable savings history then acquire credit through well recognized lenders. You may have to pay a higher interest rate, but the fees should be reasonable and they will report your success to credit agencies – and that is the only way you will ever rebuild your credit score – forget the scams.

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