How to choose the right Credit Repair Company – Don’t be Scammed!
The internet is full of many different and, at times, not too reputable credit repair companies. It is very important that someone seeking credit repair by one of these companies is aware of certain factors and how these companies operate in order to prevent being scammed.
In this light – this article will look at how to pick a credit repair company correctly. Make sure you look at the following four factors or aspects before choosing a credit repair company:
Make sure the company operates with the CROA
To begin, credit repair is not illegal. The fact that so many credit repair companies operate whether directly or indirectly outside of the law might have lent credence to the view that credit repair is illegal. In fact, in the US credit repair companies are regulated by the Federal Trade Commission under a bit of legislation called the “Credit Repair Organizations Act’ (CROA). For this reason, when choosing a Credit Repair Company, it is very important to see if they operate with the CROA. Check that they do before starting any business,or negotiations, with any such Credit Repair Company.
Don’t pay before services are rendered
In line with the previous point – the CROA states that no credit repair company can receive payment before they have rendered a service. Many credit repair companies will ask you for payment upfront. It is very important to note that this is most probably illegal and, furthermore, evidence that such a company does not operate alongside the CROA. This should, again, be reason for not undertaking business with this company. In addition to this – a large portion (even as much as 90%) of credit repair scams use this form of payment. In this light, rather choose a company that has a monthly payment method or that you only pay after deletion of certain records on your credit report (payment after a service is rendered) as they operate under the guidelines legislated by the CROA.
Watch out for large setup fees
Many companies will operate with the monthly payment method. However, often they will charge an exorbitant sign up fee only after you have signed up with them. This is illegal as companies must charge a reasonable initial setup fee. This is law. However, don’t think that companies will obey this law. Unfortunately, most credit repair companies often break the law with little repercussions or consequences. It is up to you to take them to court. Be warned.
Don’t be Fooled by False Promises and Guarantees
Don’t be fooled by any false promises or guarantees. Most credit repair companies even give their clients a specific promise or guarantee to what their credit score will be after they do their work. This is both misleading and illegal as their might be some entries for whatever reason that cannot be removed from your credit report – say it was added illegally or the debt becomes an asset to a certain company. In these two cases such credit repair companies cannot live up to these empty promises.
Lastly, also avoid companies that make specific time promises such as six, nine months or two years to fix your credit report. Such promises, are again, not only fallacious and misleading – and used merely to get a greater client base for these credit repair companies – but are also illegal. Have nothing to do with these companies.