The most important thing you should look for when you’re looking for reputable credit repair services is the affiliations of the organization you are considering. All established and reputable agencies will willingly share with you their references on request. Here are some pointers that you should keep in mind in order to steer clear of scam credit repair companies.
1. Make certain the agency is affiliated with the Ethical Credit Repair Alliance (ECRA) or another reputable regulatory body. You will often hear it advised to hire companies who have membership in the BBB (Better Business Bureau) When looking for. those agencies that are members of the ECRA are most likely to be the best choices.
This body has its own stringent codes of conduct and any member organization will represent the best interests of their clients. All credit repair companies who are members of this organization must maintain high standards of ethics in dealing with their clients. This means protection for you, the consumer, from being scammed by a dishonest company.
2. Know what credit repair is before seeking help. Most people who are cheated out of their hard earned money while they are seeking ways out of a financial jam, do not understand just what credit repair is. You need to learn what these companies are able to do and what they are not able to do.
Only when you are well aware of the difference, will you be able to identify which agencies can be trusted. For instance, derogatory accounts on your credit report cannot be removed if the credit bureaus verify their accuracy. You will find many such credit repair companies claiming they can completely clean your credit report in as little as a month. Now consider carefully; is this legally possible? If not – and it clearly is not – would you still want to pursue such unethical methods?
3. Ignore any offers you receive by e-mail. When you get an e-mail offer to repair your credit, at the very time when you most need help, don’t fall prey to the belief that divine intervention is somehow involved. Such e-mails are sent out by unscrupulous agencies who harvest e-mail addresses through unethical means, and send spam to millions in the hope that they will “catch” a person in dire need whom they can “take for a ride”!
Never be fooled by such shenanigans. These are usually always these are fraudulent companies looking to profit from people’s desperation. Reputable credit repair companies will send their offers through newsletters or emails only if you have asked to receive them.
4. Creating a “new identity” is illegal. People are far too eager to believe in this fallacy, mainly because it would seem to solve all their problems. This idea is so widely accepted due to a general ignorance regarding credit repair. But the problem is that this technique – called “File segregation” – is illegal!
Your credit score is a summation of your credit history that goes back to the time you first became an adult. So ask yourself “how can getting a ‘new’ credit history be possible”? And if you should do that, would you think it possible that doing so could be legal? So it’s glaringly obvious that the credit repair companies that offer this “solution” are crooks.
5. Demanding complete payment upfront should raise a “red flag.” Under the Credit Repair Organizations Act these credit repair service must present you a written contract and they must not collect fees until they have rendered their services. You may cancel the contract within three days.
Some companies may charge an upfront fee for credit report analysis or a consultation, and then charge additional 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, it may be because they are aware you will not be inclined to pay later once you realize that they cannot deliver on their promises. Organizations such as these are fraudulent and you should not hire them!
6. Credit repair won’t happen overnight. As explained, no reputable company can repair your credit overnight 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 removal of mistakes, and by means of changing your habits so as to pay your bills on time. More serious negative trade lines like leans and foreclosures remain on your report for 7 years (bankruptcies for 10), even given exemplary management of your finances. If there are bankruptcies, they will be there for 10 years. Don’t fall for guarantees that such items can be removed within a month or less.
7. No contract, no pay! If you don’t want to be ” taken” make sure there is a contract; this is your legal right. Fraudulent companies will shy away from offering you such a contract, and if a contract is given, important information will be missing in regard to the services, what the fees are, and the like. You will acquire an insight into these agencies based on the nature of their contract. If they do not offer a contract for any reason whatsoever.
8. If anything is guaranteed, beware! Not even the most experienced organization will guarantee results of their services they provide you. They may reasonably promise that all legal procedures will be used to improve your credit. But don’t ever believe a company that guarantees results.
Unfortunately, due to the nature of human beings, people would rather hire a company that tells them what the want to hear, instead of hiring a truthful company. Avoid falling prey to this trap! Even though you would prefer to hear about guaranteed results, credit repair companies that give you guarantees regarding results are out to scam you.
9. See if counseling services are offered. Many good credit repair companies provide them.
If the company that you are considering to engage does not, try looking a little deeper. It might not be a trustworthy agency. Reputable companies will educate their clients about repairing credit. Their services are for those matters that require longer and more complicated interventions to improve one’s credit.
10. Wrong advice means danger! Some agencies have you dispute all negative trade lines on your credit report by stating “this is not my account..” While this may result in a higher credit score in the short term, the creditors whose remarks are thus disputed may later counter it, and it will later be verified by the bureaus.
Given the shabby record keeping on the part of the credit bureaus, it’s extremely likely 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, are not trustworthy.
As you can see, there are enough red flags along the way to warn against possible fraud. The first and most important thing you should do before you seek the services of credit repair companies is to do your “homework” and learn about credit repair, what it is, what to expect, and what to avoid. Also learn about laws regarding credit repair and credit repair organizations before looking for a credit repair company. For starters pay a visit to the FTC Bureau of Consumer Protection website and the Ethical Credit Repair Alliance.
A.Brule :: Mar.14.2010 ::
General ::
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