Top 10 Scams Surrounding Bad Credit Loan
Have you been through a bad credit loan scam? It’s not pretty! There are scam artists out there preying on the weak and desperate, not hesitating to take advantage of the unsuspecting by misleading and misrepresenting the facts or outcome with no intend to fulfill the agreement. Most people with bad credit may be in a desperate situation and may think that this is a once in a lifetime opportunity but being scammed can leave you devastated and financially ruin. The best way to avoid being scammed is to know what to look out for. I have listed the top 10 scams surrounding bad credit loans that you should be aware of.
1. Credit Repair Scam - Most people with bad credit history really don’t want it to show up on their credit report, especially when applying for a loan. Credit repair companies will tell you that they can fix your credit so that you can qualify for a loan for an up-front fee of course, but technically they can’t.
2. Car loan scam – The payment ploy scam is where the dealer tells you that they can get you into this brand new car for ‘only’ $199 a month. This is probably true but on what terms? Focus more on the price of the car rather than the monthly payment. You’ll likely to end up owing more on your car than it’s worth.
3. Internet Loan scam - Scammers will contact you via e-mails with irresistible offers on loans but for a small up-front fee – It is never a good idea to pay money to borrow money.
4. Open new credit using your EIN - EINs are commonly used by businesses, but using your EINs instead of your social security number is illegal for individuals.
5. Advance- fee loan scam - Any company that promises you a loan, but only if you send them a security deposit - is probably a scam.
6. Telecommunication Scam – If a company calls and asks for your social security number, bank account number or credit card number over the phone, they may not be legitimate. It is not a good idea to give out your personal information over the phone to anyone who calls and promises you a loan.
7. Home Improvement Loan Scam – Finance companies who offer a home improvement loan are often after the equity in your home. This can be devastating because you can end up losing your home.
8. Phishing scam – An identity theft scam , Lenders are required to register in the state where they do business, so before any loan agreement you should check them out first - make sure they are registered.
9. Copy-cat name scam- Any company that uses a copy-cat name to sound similar to a well known or respected business may not be legitimate; you need to thoroughly check out their information first.
10. Counterfeit check scam – This is a check that looks similar to a real check, however when you deposit the check to your account it bounces and you end up owing the bank the money and may face criminal charges.
Bad credit loan scams can happen to anyone, but being prepared and knowing what to look for can help you avoid being a victim.