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Mar 20, 2008 9:38 pm US/Pacific
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Call Kurtis: Credit Score Warning
SACRAMENTO (CBS13) ―
Phil is 63, disabled and on a fixed income. He doesn't want to be identified. Phil started worrying about his credit rating long before his adjustable mortgage was set to go up.
"I needed a minimum of about 680 to get a good interest rate on my loan and to be able to refi it," says Phil.
He turned to California Credit Solutions which claimed it can boost credit scores.
"They say ' yeah your credit score isn't that bad we can take care of this, no problem, six months or less we will have your score of 680 or better," explained Phil.
He paid $700 up front to Tarik Smith, a former Cal Star and Dallas Cowboy, who owns the company. But Phil says, Smith didn't even make a first down. Several months went by, and his score was stuck at 651.
"He says to me ' You know your credit isn't bad, you just don't have enough of it, what you need is a tradeline.' So that was going to cost me another $690, so I paid him," says Phil.
A tradeline is a loophole in credit reporting that allows a risky creditor to be listed on accounts of someone with good credit. Critics claim tradelines are deceptive and a form of fraud.
But even if you hire a credit repair company, there's only so much it can do.
"If you have a lower credit rating and there are negative items on your credit report that are legitimate there is no way to remove them. Paying money or not," says the Better Business Bureau.
As for Phil, "My loan went from $2,222 a month to $3,022 a month; it jumped $751 like that."
Phil's mortgage payments are up, his credit score hasn't budged. And Credit Solutions has moved out of its Concord office.
The district attorney is trying to locate Tarik Smith.
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