Posts Tagged ‘Credit Repair Organization Act’

Credit Repair Organization Act

If you are considering hiring a company to fix the negative entries on your credit report, you must first be well aware of the Credit Repair Organization Act, which was put in place September 1996 with an objective to provide protection to consumers against credit repair scams. There are several organizations out there in the market that offer credit fixing services, which means they claim to fix the negative things on your report. But, it is very important for you to keep in mind that not all of them are genuine ones. Many of them are quite unscrupulous and all they want is just to make money from you. Therefore, your awareness about the provisions introduced by this act is very important.

Legal Restrictions On Credit Repair Companies

The Credit Repair Organization Act has imposed certain legal restrictions on credit repair companies. For example, it is legally mandatory for the companies to provide Consumer Credit File Rights Under State and Federal Law disclosure form to the client. By doing this, they are actually informing you (the client) that you have the right to receive a free credit report from each of the credit bureaus and that you also have the right to file dispute for certain entries on your report that you think are not complete and/or accurate. You also get to know that there is no need to sign up with a credit repair agency to get the reports or to file disputes; you can do it on your own, that too, free of cost.

Written Contract

If you still want to get help from a credit repair company, the company must first provide you a written contract as per the Credit Repair Organization Act, where all the terms and conditions must be explained clearly, such as the promises they are making, the fees they will charge, estimate turnaround time they will take to perform the promised services, and other such things. You are strongly recommended to read this contract thoroughly before you sign it. There must also be a clause in the contract that should provide you an option to cancel the agreement within three business days. In such cases, no cancellation fee will apply.

If you find out that a company is violating the laws explained in the Credit Repair Organization Act, you can file a lawsuit against them and file a compensation claim for punitive and actual damages.

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