In this article, you will learn how to avoid bad credit loan scams. When your credit score is low, it is very hard to get another credit card, loan and a lot more. This is because lenders have already discovered that you are not creditworthy. They simply decline your application. But there are companies out there who want to exploit people with bad credit. Many of these companies do scam bad credit cardholders. What can you do to avoid being their victims?
How To Avoid Bad Credit Loan Scams : What Do The Scammers Do?
They promise to give you a loan if you give then a certain amount of money. They call this money a lot of names like a loan origination fee, loan insurance fee, or even collateral for the loan. Once you send the money, the case is closed. You will never hear from them again. Legitimate lenders do not demand any money at all from you before lending you money.
How Do You Know Scammers?
Here are some ways to know them :
- They demand for upfront payment through a method that is not U. S. mail, credit card or personal check. This is a direct opposite ofdown payment on a mortgage or car loan.
- Scammers demand for your Social Security Number, credit card and account number. They will use this to defraud you.
- Giving you an assurance to give you a loan when they have not checked your credit report or score.
- Scammers promise to give you a loan not minding your credit history, past bankruptcy and income. A legitimate lender needs a proof that you must surely pay back.
- They ask victims to send money through Green Money MoneyPak, cryptocurrency, and Venmo. They know that these payment platforms are hard to trace.
- If the lender is in Canada or the Caribbean, you have to be very careful. Bad credit loan scams are said to have started from there. Always review critically, it can still come from another place and be a scam.
How To Protect Yourself
Avoid giving your personal or sensitive information on an online platform that is not trusted. Before doing any transaction with any online lender, take time to verify their authenticity. Once they start sounding too good to be real, run for your life. Avoid sending money to receive a loan. Legitimate lenders do not need you to deposit the money you don’t have to get a loan.
How To Avoid Bad Credit Loan Scams : Are You A Victim of This Scam?
Take immediate action to notify your state Attorney General and Better Business Bureau. If the scammer was from another country or state, inform the FBI and the Federal Trade Commission.