Your credit score is a major factor when purchasing a Northern Virginia/South Carolina home.  In fact, Freddie Mac and Fannie Mae won't even consider any applicant with a credit score below 620.  Most people don't have excellent credit.  That's why there is such a proliferation of credit repair companies out there.  You've probably heard their spiel promising that they can get you top rate credit for a fee.  Not all of these are reputable companies, though.  You need to know how to identify a credit repair scam.

If the following promises or requirements are made by a credit repair agency, consider these red flags because they may be a credit repair scam:

• Makes you pay up front.  The Credit Repair Organizations Act mandates that credit repair agencies cannot receive any compensation until after they have completed all services promised to their client.
• Promises you that they can remove ALL negative credit items whether they are accurate or not.  This is illegal.  Only information that has been mistakenly reported to the credit agencies can be removed.  If it is a true negative credit item, there is nothing you can do about it.  Only time and making responsible, positive steps in maintaining your credit will compensate for a negative credit history.
• Suggests you dispute any and all negative information on your credit report, even if it's correct.  Again, only wrongly reported items can be legally removed from your credit report.
• Tells you not to contact Experian, TransUnion or Equifax yourself.
• Won't advise you on what you can do for free yourself to improve your credit or let you know what your rights are as a consumer in regards to repairing your credit.
• Suggests that you create a whole new credit history by applying for and then using an Employer Identification Number (EIN) to use in place of your Social Security number.

You will be held legally responsible for any fraud or illegal activity you participate in either directly or through an irreputable company.  This includes filing false documents (saying something is wrong when it isn't), applying for an EIN under false pretenses and providing false information on a credit application through the mail, phone or internet.  That's why it's important to identify a credit repair scam so you can avoid finding yourself in illegal hot water.  It's smart to get your credit in order before you apply for a Northern Virginia/South Carolina home, but you need to do it in a legal manner.

Gene Mock, your Northern Virginia, South Carolina and Washington DC real estate specialist

Originally posted on my Northern Virginia homes blog here: http://northernvirginiahomes.net/2012/02/02/identifying-a-credit-repair-scam/.