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What are credit repair scams?

Posted: 03 Jun 2022

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Don’t fall for these credit repair scams

Consumers should be careful of credit repair scams claiming to improve credit scores and fix credit reports overnight. Especially if they are charging an upfront fee. These types of scammers are often found on popular classifieds websites and social media. They also could distribute fliers in your area or place ads in local papers.

In South Africa, charging consumers an upfront fee to fix credit reports is illegal. Schedule 1 of the Consumer Protection Act (CPA), as well as the National Credit Act (NCA) specifically documents this.

Types of credit repair scams

The first thing to remember is, scams can take many different forms, from simple emails or SMSs or advertisements offering to repair a consumer’s credit profile. Here are a few ways opportunists try to convince consumers that they can help :

  • They promise overnight credit report repair and score improvement. Credit scores take time to change. They usually do not show improvements within a few days or weeks after information changes on your report.
  • You need to pay an upfront fee to fix credit reports or scores. Under South African law, this is illegal.
  • Scammers promise to remove information that is accurate. Information that is inaccurate (e.g. due to error or fraudulent activity on your name, etc.) can be removed after the disputes/investigations process, which is offered for free by a bureau. No one other than a bureau can remove information (after the bureau has followed the due process).
  • They discourage you from contacting the bureaus on your own to resolve the issue.
  • Scammers don't explain the process and the role that they will play.
  • They wouldn't tell you that there is a free process available.
  • They recommend you dispute your credit report information without having seen your credit information or verifying the validity of this data with your credit providers.
  • Lastly, scammers usually don't explain to you upfront what it is that they will do for you and how it will benefit you.

Note: A credit repair agency is not able to change your score at the credit bureau. Only you can do that by ensuring the data on your report is accurate and up to date (through logging a dispute) and improving the information on your report by using credit responsibly and paying your full instalments on time.

Final Note

In summary, you are the best person to manage your financial information. Yes, it's good to seek out help. But ultimately, if it sounds too good to be true, you may want to think twice.

You can log your dispute with Experian at My Credit Check.

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