Credit Repair Companies – Best Ten Pointers
The first thing you should look out for when you’re looking for reputable credit repair services is the affiliations of the company under consideration. All established and reputable agencies will be eager to give you their references on request. Here are a few tips to keep in mind in order to steer clear of fraudulent credit repair companies.
1. Check to see that the company is a member of the Ethical Credit Repair Alliance (ECRA) or another reputable regulatory body. You are often advised to choose businesses who are members of the BBB (Better Business Bureau) When looking for. those agencies that belong to the ECRA are some of the best.
This body accepts only those members who agree to a stringent code of ethics and any business that gets their approval will represent your best interest. All credit repair companies that find approval under this professional alliance must maintain high standards of ethics in their business practices. The result is to protect you, the consumer from any type of unethical and sub-standard practices.
2. Know what credit repair is before seeking help. Most people who are cheated out of their hard earned money when hiring help with their credit, do not know anything about what repair of credit involves. You should be knowledgeable about what these services can do for you and what they can’t do.
Only if you have knowledge of the difference, will you be able to distinguish which companies are dishonest and which are not. For instance, no one can remove negative remarks entered on your credit report if these can be verified. There are those credit repair companies claiming to be able to completely clean your credit report in a very short time. Think carefully; is this legally possible? And if not you would be well advice to run the other way.
3. Do not accept e-mail offers. At a time when you find yourself in financial desperation, don’t think for a moment that it’s good fortune that sent you such an e-mail. These e-mails are sent by scammers who harvest e-mail addresses through unethical means, and send out e-mails by the millions meaning to trick an unsuspecting “client” whom they can scam for all they’re worth!
Don’t fall for these e-mails. In the vast majority of cases these are fraudulent companies hoping to prey on the unwary. Proper credit repair agencies will send their offers by e-mail or US mail only in the case that you have opted in to receive them.
4. Creating a “new identity” cannot be done legally. This fallacy is believed by many people, primarily because it looks like the “Silver bullet” that will resolve all their difficulties. This is so easily believed because, again, most people do not understand credit repair. This method is called “File segregation” and it’s most definitely illegal!
Your credit score is a reflection of your payment history from the onset of adulthood until the present. Thus, it’s just not possible to get a “new” credit history. So doesn’t it seem logical that any attempt to do that must be illegal? So it’s obvious that the credit repair companies that propose this as a solution to your difficulties are not legitimate.
5. Demanding complete payment upfront should raise a “red flag.” According to Federal Law the agency must provide you with a written contract and that they cannot charge you a fee prior to completion of the services offered. You also have a right, by law, to cancel the contract within three days time.
There are companies who do charge an upfront fee for an initial consultation, and charge monthly fees after that as follow-up with the credit bureaus is continued on an ongoing basis. However, if you are required to pay the complete charge before any services have been rendered, it may be because they are aware they won’t get paid when it becomes obvious that they cannot deliver on their promises. Companies such as these are ripoffs and you would be will advised to run the other way!
6. Repairing your credit is a time-consuming process. As stated previously, no trustworthy credit repair business can solve your credit problems in the blink of an eye or delete derogatory accounts from your credit report if it is verifiable.
At best the not-so-serious problems can be countered over 2-3 months time, by getting erroneous information deleted, and by improving the way you handle your finances and overall payment of bills and loans. More serious issues such as leans and foreclosures remain on your report for 7 years (bankruptcies for 10), even with excellent financial management. Bankruptcies cannot be removed for ten years. Don’t fall for guarantees that such items can be removed within a month or less.
7. Not given a contract? Look elsewhere! To avoid being scammed, make certain you are given a written contract; this is your rights under the law. Scammers are leery of presenting a contract, and if they do there will be information missing regarding what services will be provided, the fees charged, and the like. You will better understand these organizations based on their contract. And if they do not offer a contract.
8. No reputable agency will make guarantees! Not even the best and most experienced agencies will guarantee results of their credit services. They may reasonably promise that all legal procedures will be used to improve your credit. But to guarantee results is dishonest and unrealistic.
Unfortunately, due to the nature of human beings, people prefer to hire a organization when they are told what they want to hear, instead of hiring an agency that is truthful. Don’t be taken in by this deception! Although you might rather hear promises of positive results, credit repair companies that give you guarantees regarding results are out to scam you.
9. See if counseling services are offered. A good many credit repair companies provide them.
If the company that you are considering to engage does not, look a bit further. It may be a less than trustworthy company. Trustworthy agencies encourage their clients to become knowledgeable in regard to credit repair. The services the agency performs are for those matters that require professional expertise to clean up all derogatory errors on the credit report.
10. Wrong advice means danger! There are those businesses that encourage you to dispute every derogatory account on your credit report declaring “this is not my account..” While this may result in a higher credit score in the short term, the creditors whose loans have been disputed may later counter it, and at a later time the bureaus will verify it.
Because the credit bureaus do a very bad job of keeping accurate records, the probability is very high that the details of any one trade lines contain errors. But credit repair companies that have you proclaim “this is not my account” even if it is, are not trustworthy.
As you can see, there is no shortage of red flags to warn against possible fraud. The first thing you must do when you seek to hire credit repair companies is to educate yourself on what “credit report” and “credit score” mean. In addition you need to educate yourself regarding laws pertaining to credit repair prior to seeking help with your credit. A good beginning is to visit the web sites of the FTC Bureau of Consumer Protection and the Ethical Credit Repair Alliance.
