Posts Tagged ‘credit repair scam’

How To Recognize A Scam While Choosing A Credit Repair Company?

When it comes to choosing a credit repair company, there are several things that you must take into your careful consideration, especially because the market is full of unscrupulous companies. You cannot trust anyone just because they are making alluring claims and offering quick fixes. You are strongly recommended to do a thorough research and background check before you sign up for a credit repair service. Following are some of the warning signs that you should particularly look out for. You must wary of all those companies that ask you to do any of the following things.

They Want You To Pay Their Fee in Advance

A reputed credit repair company will never ask you to pay their fee upfront. If you really need the services of a professional “fixing” expert, make sure you do not pay in advance. As per the credit Repair Organizations Act, it is illegal for such companies to ask for advance payments from their clients before performing the services with results as promised.

They Do Not Educate You About Your Legal Rights

As per the laws applicable in this regard in the United States of America, the companies that offer credit repair services must explain to you the options available for your specific situation and the kind of legal rights you have. It is interesting to note here that once you know about your options and your legal rights, you will not feel like using professional services to repair your credit because then you will get to realize that you can do everything on your own for free. You are strongly recommended to ask the credit repair company you are considering signing up with to first educate you about what kind of rights and options you have.

They Recommend You Not To Contact The Credit Bureaus Directly

Some companies unscrupulously recommend you not to contact the three major credit bureau agencies directly. The reason is that when you contact them directly, it is likely that you will get to know the truth – and, the truth is that you can follow the procedure yourself for free.

They Claim To Eliminate All Negative Entries Even If The Entries Are Correct

Some companies, in order to make their offers attractive and alluring, make big claims. For example, they may tell you that they have strong “inside connections” and that they can get all negative entries removed from your credit report. Here, it is very important for you to keep in mind that if the entries are correct and complete, there is NO LEGAL WAY to remove those entries. All you can do is to reduce their effects on your score by adding more positive entries, which takes time (several months). So, be wary of any credit repair company that makes such false claims. Even if they manage to do it by hook or by crook and things look fine, you are very much likely to get into legal troubles at a later stage.

They Suggest You To Dispute All The Entries On Your Report (Even The Correct Ones)

When you file a dispute with credit bureau for the correction of a specific entry on your report, that entry is temporarily removed until the dispute is resolved. This way, if it is a negative entry, you may see an improved credit score temporarily as long as the procedure to resolve that dispute is on. But, once the bureaus find out that the entries are correct, your score will get reduced again. Many credit repair companies try this trick – they file disputes for all entries (especially all negative entries) on your report. They thus show you an increased credit score and ask you to make the payments. But, once the investigation is complete and those negative entries (when found correct) are restored, your score gets back to its former level.

It is very important for you to understand that a credit repair company cannot do anything different that you cannot do. Whatever they do for a fee, you can do it for free; it is just that you have to be well aware of the procedure (which is not very difficult) and your legal rights. If needed, it is better to consult an attorney who has in-depth knowledge of credit repair laws. Always remember, the more informed you are, the better you can protect yourself. Your ignorance and unawareness on the other hand can prove to be very costly.

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