It is an unfortunate truth that the credit repair industry as a whole has come under a lot of pressure due to the actions of various unethical and (sometimes) illegal credit repair organizations. The Federal Trade Commission has worked with the attorneys general of several states to shut down credit repair companies that operate outside of legal process. When choosing a company to help repair your credit, it’s imperative that you look for an established company that has passed review by the FTC, Attorneys General, and the Better Business Bureau. In addition, there are other things to look for to help you make a good decision about credit repair.
Things to keep in mind before hiring a credit repair organization:
* Offer to “create a new identity”
* Claims they can remove debts, liens, and bankruptcies from your credit report
* Claim to remove accurate negative information from your credit report
* You are not honest about what you can legally do on your own
* Asking for money upfront before services are provided (which may violate ‘right of termination’ laws
* Make outrageous claims about how quickly or effectively they can remove items from your report.
What does a real credit repair company do that makes it a legitimate company?
* Can only help remove inaccurate information on your credit report
* Provide comprehensive advice on how to be a better consumer
* Have established relationships with creditors and the big three credit bureaus
* Be upfront about cost, only ask for a relatively small startup fee, and offer risk-free services with a “cancel anytime” policy
*Introductory cost follows state-mandated “right of withdrawal” periods where they don’t actually charge your credit card until after the period ends
* They have successfully served many customers, with a relatively small number of customer complaints and proof of their services provided.
* Never rely on a guarantee that we can “clean your credit” and make sure the company is upfront about the fact that credit repair is typically a 3-6 month process and can even take 1 full year
* Be transparent about what they do and how you can repair your own credit without their services
* Make sure they are not on the FTC’s watch list or their database of credit repair scams
Even the most compliant, transparent, and industry-leading companies are sometimes powerless to help with certain credit situations facing consumers. There are many credit organizations that make false claims, and because of this, some customers may have inaccurate information about what can be done legally to help them repair their credit. If a credit repair company cannot help you, it is their duty to advise you on how best to handle your situation and not sign you up for additional services you do not need.
The credit repair act is legal and it is within the consumer’s rights to seek removal of inaccurate credit repair information through any legally acceptable channel available to them. Please note, however, that participation in any illegal credit repair schemes could result in you being punished for your participation. Credit repair scams are typically filed on charges of mail or wire fraud, or the federal crime of providing false information to the IRS or credit bureaus. These accusations are not taken lightly, and it is not worth taking the risk of being involved in a credit repair scam to repair your credit when perfectly legal and acceptable solutions are available.
If you believe you have already been the victim of a fraudulent credit repair company, feel free to report the case to your state Attorney General, file a complaint with the Better Business Bureau, or visit http://www.fraude.org and tell your experience there.