Credit Repair Agencies
Hiring a Credit Repair Company
There are over 3,000 credit repair companies in the United States with each claiming to be better" than the others. One of the most important things to know as you embark on your search for the best credit repair company is that there is nothing a credit repair agency can do to fix your credit that you can't do yourself. So you might consider saving your money and repairing your credit yourself.
Only time, a conscious effort, and a personal debt repayment plan will improve your credit report.
No one can erase accurate negative information from your credit report. Only incorrect information can be removed. Accurate information stays on your record for 7 years from the time it's reported (10 years for bankruptcy). Even information about bills you fell behind on but now are paid will remain on your report for these time periods.
Howerver, If you decide to seek assistance from a credit repair company, you are protected under the Federal Credit Repair Organizations Act.
Warnings About Hiring Credit Repair Agencies
You see the advertisements in newspapers, on TV, and on the Internet. Their claims are usually in this format:
Credit problems? No problem!
We can erase your bad credit in 30 days!! -- 100% guaranteed.
Create a new credit identity -- legally.
We can remove bankruptcies, tax-liens, judgments, and bad loans from your credit file forever!
Promises to “fix” your credit report may be tempting, but they’re not true. Do yourself, and your wallet, a favor. Don't believe these statements.
Before using a local credit counseling service find out if the counselors are certified, how much the services cost and if the agency is accredited. Also, check with your employer, credit union or housing authority for no-cost credit counseling programs.
Just beware of credit repair offers from companies that:
Want you to pay for credit repair services before any services are provided.
Do not tell you your legal rights and what you can do -- yourself -- for free.
Recommend that you not contact a credit bureau directly or
Advise you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity.
Can credit repair companies be trusted?
While some credit repair companies are outright frauds, others are not fraudulent and they use the dispute process to obtain impressive results. In fact, they delete thousands of negative credit listings every day.
Unfortunately, it is risky to trust anyone to help you restore your credit. It is estimated that fraudulent credit repair companies have bilked Americans out of more than fifty million dollars. The majority of credit repair companies were started by entrepreneurs with a penchant for marketing. Consumers have flocked to these "credit doctors" only to discover that their advertisements proved far more impressive than their results. Hiring a credit repair company is like playing Russian roulette. Many of them are effective and legitimate, but it is difficult to tell a rip-off from the real article.
So, can credit repair companies guarantee results?
Not a chance! No credit repair company is so good that it can guarantee a specific outcome. It would be like a defense lawyer guaranteeing that the jury will find his client innocent. Guarantees are a sure sign of credit repair fraud. A warranty, where the credit repair company promises a refund if certain results don't occur, is a better, more realistic claim.
Not surprisingly, the Credit Bureau have declared war against the credit repair companies and those selling instruction on how to do-it-yourself. The bureaus lambaste credit repair companies in the media and send anti-credit repair literature to anyone whom they suspect of using credit repair services. The bureaus unflinchingly deny that accurate information can be removed from a credit report.
The simple truth is that you do not have to endure bad credit for seven to ten years as long as you feel comfortable challenging the accuracy or verifiability of your credit listings. If so, it is possible to restore creditworthiness within a much shorter time.
However you decide to address your credit challenges, realize that regardless of what you may hear in the news media, thousands before you have sought help and restored their credit. They can show you their homes, cars, and credit cards. Despite the newspaper articles, TV reports, and other credit bureau propaganda to the contrary, the simple truth remains: you can restore your credit.
Your rights under the Credit Repair Organizations Act
By law, credit repair organizations must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign anything. The law contains specific protections for you. For example, a credit repair company cannot:
make false claims about their services
charge you until they have completed the promised services
perform any services until they have your signature on a written contract and have completed a three-day waiting period. During this time, you can cancel the contract without paying any fees
Your contract must specify:
the payment terms for services, including their total cost
a detailed description of the services to be performed
how long it will take to achieve the results
any guarantees they offer
the company’s name and business address
What to do if you've had problems with credit repair agencies:
Many states have laws strictly regulating credit repair companies. States may be helpful if you've lost money to credit repair scams. If you've had a problem with a credit repair company, don't be embarrassed to report the company. Contact your local Consumer Affairs Office or your State Attorney General (AG). Many AGs have toll-free consumer hotlines. Check with your local directory assistance.
You also may wish to contact the FTC. Although the Commission cannot resolve individual credit problems for consumers, it can act against a company if it sees a pattern of possible law violations. If you believe a company has engaged in credit fraud, send your complaints to:
Federal Trade Commission
Washington, DC 20580
The National Fraud Information Center (NFIC) also accepts consumer complaints. You can reach NFIC at 1-800-876-7060, 9 a.m. - 5:30 p.m. EST, Monday - Friday, or at https://www.fraud.org on the Internet. NFIC is a private, nonprofit organization that operates a consumer assistance phone line to provide services and help in filing complaints. NFIC also forwards appropriate complaints to the FTC for entry on its telemarketing fraud database.
Note: You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. It's a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.
Free Credit Counseling is available
If you have credit problems, get counseling. Your local Consumer Credit Counseling Service (CCCS) can provide advice about how to build a good credit record.
The CCCS may also be able to make payment plans with your creditors if you've fallen behind. These services are offered for free or at a very low cost. To find the nearest CCCS office, call toll-free, 800-388-2227, or go to www.nfcc.org.
|How to order a free credit report||Dealing with Credit Bureaus|
|How to repair bad credit yourself||Profile of a Perfect Credit|
|How to Improve your credit score||Credit & Marriage|
|How to dispute negative credit||Know your legal rights|
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