Using Credit Repair Services and Avoiding Scammers

While credit repair can be easily done yourself by disputing erroneous entries on your credit report, it still can be a confusing and time consuming task. Most of the time, credit repair can be done effectively yourself. However, there are definitive benefits associated with a reputable credit repair service, who ensures that your credit is fixed correctly and comprehensively.

If you are thinking of paying a credit repair agency to improve your credit history and score, it is important that you choose a reputable company. While most legitimate credit repair services do charge fees, normally between $40 and $100, the peace of mind that comes with knowing that a specialist is restoring your bad credit is worth the cost.

Checklist to determine the legitimacy of the credit report service company

• Run their business name through several Internet search engines to review consumer feedback and results.
• Check the Better Business Bureau of the state in which they are located.
• Make sure that there is a three day right to cancel their service.
• No fee should be collected before work has been done.
• Review their business history and number of satisfied clients.
• They should know legal issues, current consumer laws, and apply these laws.
• Having a privacy policy is pertinent, as well as confidentiality protection.

Warning signs of credit repair scams

Scammers usually are very big on the positives of the benefits, leaving the negatives out of the conversation until you discover them yourself. For example, when a company offers “guaranteed credit” or “guaranteed removal of credit items,” this is a huge red flag. It is impossible for a credit repair service to guarantee you any results, as the power is solely in the credit agencies’ hands.

Some companies will lie about their ability to use secret “tricks” to obtain a better credit report for you. There are no “secrets” or “tricks” - the law clearly defines what legally can and cannot be done, and all legitimate, reputable credit repair services follow the rule of law.

Legitimate specialists discuss details of your finances, and their services normally always entail some amount of financial education. Scammers, on the other hand, will be vague with their plan and how it directly relates to your financial circumstances. As a general rule of thumb, if you cannot define or explain the company’s plan of action to someone else, it is probably a less than reputable service.

There are equal amounts of good and bad companies in the industry, and it is important for you to review them thoroughly before committing or signing any contracts. More often than not, these scammers prey on consumers that have poor credit already, and the companies just take their money and vanish. Do not let this happen to you. If you notice any of the warning signs listed below, do not engage in any further conversation with the individual or company.

Checklist of the signs of credit repair service scams

• They do not advise you of your rights, and they never even mention that you could repair your credit yourself.
• They recommend that you are not to contact the credit bureau.
• They suggest that they can get you a “new” clean credit file if you apply for an Employer ID Number (This is illegal and can land you in prison).
• They advise you to dispute all of your information listed in your credit file – even all of the accurate items.
• The company says they have an “in” with the credit bureau - this is illegal.
• They say that they can convince creditors that you hold no debts, when in actuality, you do owe them funds.
• They tell you that you can use contacts of theirs to get a mortgage, car loan, or credit card – regardless of how bad your credit is.
• They give you a 900 number and say that it will give you the information to repair your credit yourself.

Related Articles:

• Credit Repair Dispute Letters - Do Not Send Them Off Blindly!
• Watching Your Credit by Ordering Your Credit Reports
• Seven Steps to Disputing Bad Credit – A Do It Yourself Job
• How to read a credit report to improve your score
• How Many Credit Accounts Should I Have?
• Credit Repair - The Process, and How to Detect Scammers