Credit Scams and How to Avoid Them

Avoiding Credit Scams

A strong credit profile is an essential part of your overall financial health. Paying your bills on time and using credit responsibly are the top two things you can do to build and maintain a healthy credit profile. Unfortunately, there are fraudsters out there just waiting to tear down what you’ve built.

Being vigilant for credit fraud and scams is a vital part of protecting your credit. Knowing what to watch for can save you time, money, and a ton of frustration in trying to repair your credit down the road. Here are the top three credit scams and how you can avoid them.

Credit Repair Scams

If your credit profile contains negative history, then companies promising to erase that history for a fee can be tempting to use. Occasionally, they’ll even claim they can guarantee you a specific credit score. The only way to legitimately repair your credit is to repay your debt.

That said, there are reputable financial counselors out there who can help you get your debt under control and improve your credit score. In fact, your Clearwater membership offers you access to financial counseling services at no cost. If you do try to use a credit repair company, below are the top three warnings flags that you may not be dealing with a reputable firm.

1. Pressure you to pay upfront fees before they ever provide you services.
2. Promise they can remove negative credit information.
3. Tell you not to contact credit reporting companies.

Identity Theft

If a fraudster gets ahold of your account, card, or social security numbers, they can apply for credit, take out loans, and make purchases, all under your good name. Then, when the fraudster doesn’t pay the loan, creditors contact you. By the time you find out about it, your credit profile is often already affected. Here’s how to protect yourself.

1. Shred any documents with personal or account information on them.
   At Clearwater, every day is Shred Day. Just drop your shredding by any Clearwater branch during regular business hours, and we’ll ensure your documents are shredded safely.
2. Do not share your sensitive info such as passwords and card numbers.
   Sharing your bank account numbers and/or passwords is like giving someone the keys to your financial future. Once they get into your account, not only can they access your cash, but they can also easily get your account numbers, cards numbers, and more, putting you and your credit profile at significant risk. Visit our online Education Center for identity theft prevention.
3. Review your credit reports AT LEAST once annually.
   Visit annualcreditreport.com once annually for free copies of your credit profile from the three consumer reporting agencies. Scan your credit reports carefully for accounts you do not recognize. If you see accounts you do not recognize, follow these steps from the Consumer Financial Protection Bureau (CFPB) to prevent further damage.

Lottery, Work at Home, and Online Dating Schemes

Although these are three distinctly different types of fraud, they have a common thread amongst them. Fraudsters will get ahold of you, claiming you’ve won a lottery, they have a great job opportunity for you, or they have the perfect match for you.

Once they’ve got you hooked, they’ll ask for your credit card number to process a small fee in exchange for what they can offer. Then, they’ll take your card number and make fraudulent charges. Our best advice? Never provide your card info online or over the phone to a company you do not know and trust. And remember, if the opportunity sounds too good to be true, trust us, it is.