Credit Repair

Basic Things To Do Before Signing A Credit Repair Contract

When it comes to signing a credit repair contract, there are several things that you need to take into your careful consideration. The first thing that is very important for you to keep in mind that according to the FTC (Federal Trade Commission), there is no need to hire a third-party agency to clean up your credit. There is a set procedure that a person has to follow in order to achieve an error-free credit report. All you have to do is just to be well aware of the steps involved with the procedure. However, if you do not have much time for this or do not want to take the stress of handling such things on your own, you always have an option to hire a credit repair company to do it on your behalf. But, make sure that the company you are hiring is a legitimate and reputable one. The United States of America has enacted a specific Credit Repair Organization Act, which all such companies must follow thoroughly.

A Written Contract Is Legally Mandatory

The company must provide you a written credit repair contract, where everything about the services and the cost involved with the same must be explained thoroughly, in a very clear language. There must not be any hidden clause that consumers cannot understand. The companies are also obligated to explain to their clients the legal rights they have regarding credit repair. It means even though the agency is being hired to repair the client’s credit, it is legally mandatory for the agency to tell their clients that there is no need to hire any agency to perform such tasks and that they can do it on their own. If the client still wants to use their services, there is nothing wrong with it.

Advance Fee

The most important part of the Credit Repair Organization Act is that a company must not charge any fee from consumers until they perform the service with the results as promised. A credit repair contract must explain the terms and conditions about the fees that the company will charge for their services. It must also explain the mode of payment. Reputable companies will never ask you to make any payment in advance. They will first explain what kind of services they are going to offer. They will first meet their promises. And, then in the end, they will ask you to make the payment. As long as the mode of payment is concerned, you may be asked to authorize the company for debit authorization at a future date or to submit a post-dated check. But, in any case, it is illegal for the company to collect their fee before completing the promised services.

Overall, it is very important for you to read the terms and conditions explained in the credit repair contract before you sign it. Beware of those companies that make highly lucrative claims that sound too good to be true. Making false claims is treated as a fraudulent activity and you can file a lawsuit against the company for this.


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Posted in Credit Repair, Credit Repair Services | 1 Comment »

One Response to “Basic Things To Do Before Signing A Credit Repair Contract”

  1. Ritchie says:

    Credit Repair is not a very complicated procedure; FTC has the guidelines for the consumers. There is no need to hire a credit repair counselor you can do it by yourself very efficiently. Your awareness about the rules of FTC will play an important role in getting your error free credit report. But if you do not think that you can do this by yourself you can hire a credit repair company, the selection of the company must be done with precaution, Doa thorough search of all the past records of a particular company before signing any contract with the company. There are so many legal rights which are beneficial for you, all you need is the awareness regarding such laws. Credit Repair Organization Act has a very important clause regarding the payment, the fee structure must be mentioned in the contract and the mode of payment should also be mentioned in the contract. The company can not demand any payment in advance, they will first perform their services only then they can demand their fee, however they can take the post dated cheques from you but if the company demands its fee in advance it will be called completely illegal.

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