Credit Repair Companies Pointers – How to Avoid Scams
The first issue you need to watch for when you’re in need of trustworthy credit repair services is the affiliations of the agency you are looking at. Every reputable company will willingly share with you their references on request. Here are a few tips that you should keep in mind so you can avoid fraudulent credit repair companies.
1. Make certain the agency is affiliated with the Ethical Credit Repair Alliance (ECRA) or a similar regulatory organization. It’s often suggested to select businesses who are members of the BBB (Better Business Bureau) But when evaluating. those businesses affiliated with the ECRA are always a good choice.
This organization requires that its members agree to a stringent code of professional ethics and the member companies will do their work in the client’s best interest. All credit repair companies who are members of this organization must maintain high standards of ethics in their business practices. As a result this means protection for you from being scammed by a dishonest company.
2. Learn a bit about what credit repair is before looking for assistance. Most of those who end up being scammed while they are seeking ways out of a financial jam, do not know anything about what repair of credit involves. Make sure you understand what credit repair services can do for you and what they are not able to do.
Only if you know the difference, will you be able to identify those companies who offer you false promises. For instance, derogatory accounts on your credit report cannot be removed if the credit bureaus verify their accuracy. Many credit repair companies telling you that within as little as a month you can have a completely clean credit report. Now consider carefully; is this possible to do by legal means? And if not are you sure you want to engage in methods that are illegal?
3. Never accept unsolicited offers by e-mail. 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. Such e-mails are sent out by unscrupulous agencies who use unethical means to gather e-mail addresses, and send spam to millions in the hope that they will “catch” someone in financial distress whom they can scam for all they’re worth!
Don’t be taken in by such tricks. In the vast majority of cases these are unscrupulous thieves trying to take advantage of people’s desperation for their own profit. Reputable credit repair companies will make contact with you through e-mails or newsletters only if you have requested information.
4. You cannot legally create a second credit report or a “new identity.” This is a big mistake too easily accepted by a lot of people, mainly because it would seem to solve all their problems. This idea is so widely accepted due to a general ignorance regarding credit repair. This illegal practice is called “File segregation” and will get you in deep trouble with the law!
Your credit score is a reflection of your payment history from the onset of adulthood until the present. So how could it be possible to get a “new” credit history And since it’s not possible, any attempt to do so would have to be illegal. So it’s glaringly obvious that the credit repair companies that propose this as a solution to your difficulties are crooks.
5. If a company asks for complete payment before any services have been rendered, beware! Under the Credit Repair Organizations Act the agency must provide you with a written contract and they must not collect fees until they have rendered their services. You also have three days time to cancel the contract if you find it unsuitable.
Some companies may charge an upfront fee for credit report analysis or a consultation, and thereafter charge monthly fees as they continue to work on improving your credit. However, if you are required to pay the complete charge before any services have been rendered, chances are the reason is because they realize you will refuse to pay once you know that they cannot deliver on their promises. Organizations such as these are fraudulent and you should not hire them!
6. Repairing your credit is a time-consuming process. As explained, no reputable company is able to repair your credit right away or delete derogatory accounts from your credit report if it is verifiable.
At best, less serious issues can be fixed in about 2 -3 months, by correcting errors in your report, and through improving how you deal with your finances. More serious negative trade lines like foreclosures and repossessions will remain on your report for seven years, notwithstanding top-notch financial management. It will be 10 years before bankruptcies can be deleted. If you are given guarantees of a fast removal, you can be sure of fraud.
7. No contract, no deal! Always insist on a written contract; by law you have the right to insist on a written contract. Dishonest agencies would prefer there’s no contract, and if they do there will be information missing regarding what services will be provided, the amount of the payments, and so on. You will be able to understand the nature of these companies by looking at the contract. And if for any reason no contract is offered.
8. If anything is guaranteed, beware! Not even the best and most experienced agencies will guarantee anything as far as the results of their services they provide you. After looking at your credit report, they can promise to use all legal means to affect improvement in your score. However, in the credit repair business there can never be any hard core guarantees in regard to results.
But an unfortunate fact of human nature is, most people are more inclined to believe – and to hire – an agency that tells them what they prefer to hear, rather than hire a credit repair business who gives them an honest and truthful assessment of the situation. Don’t be taken in by this deception! Even though promises of results are more appealing, credit repair companies that guarantee they can achieve given results are not telling the truth.
9. See if counseling services are offered. A good many credit repair companies will offer free counseling services.
If the agency you are looking at does not, look a bit beyond. It might not be a trustworthy agency. Reputable companies will educate their clients about repairing credit. The services they provide are for those matters that require professional expertise toward raising the credit score.
10. If you’re given wrong advice, look out! Some organizations will dispute all negative trade lines on your credit report writing “this is not mine..” Even though in the short term the credit score may improve, the creditors whose trade lines were disputed may later counter it, and at a later time the credit bureaus will verify it.
Because of the numerous inaccuracies in record-keeping by the credit bureaus, the likelihood is great that there are inaccuracies on your credit report. But credit repair companies that have you proclaim “this is not my account” if this is not truthful, must not be trusted.
As you can see, there are plenty of red flags along the way to warn against possible fraud. Before anything else, before you hire credit repair companies is to be informed in regard to credit repair, and terms like “credit score” and “credit report”. You also need to know the minimum applicable laws before looking for a credit repair company. A good way to begin is to visit the FTC Bureau of Consumer Protection website and the Ethical Credit Repair Alliance.