The first issue you need to watch for when you’re in need of trustworthy credit repair services is the affiliations of the agency you are considering. All established and reputable agencies will be glad to give you their references on request. Here are a few tips that you should keep in mind in order to steer clear of dishonest credit repair companies.

1. Check to see that the company is a member of the Ethical Credit Repair Alliance (ECRA) or a similar organization. It’s often suggested to hire companies who are members of the BBB (Better Business Bureau) But when evaluating. those companies that are members of the ECRA are always a good choice.

This organization holds its members to very high ethical standards and any member organization will give you their best services. All credit repair companies who are members of this professional alliance must maintain high standards of ethics in everything they do pertaining to repair of credit. This helps to protect you from being “taken” by a predatory scammer.

2. Learn a bit about what credit repair is before looking for assistance. Most of those who end up being scammed while they are seeking ways out of a financial jam, do not understand just what credit repair is. You need to learn what these companies are able to do and what they are not able to do.

Only when you have this knowledge, can you identify which organizations are reputable. For example, no one can remove negative remarks entered on your credit report if these can be verified. There are a lot of credit repair companies telling you that within as little as a month you can have a completely clean credit report. Now take a close look; is this even possible to do legally? If the answer is negative it would be a bad idea to hire this company.

3. Never accept unsolicited offers by e-mail. It’s not fate that sent you an email offering to repair your credit at a time when you are desperately looking for help. These e-mails are sent by scammers who use shady methods to get your e-mail address, and send out emails to millions of unsuspecting victims trying to fool a person in dire need whom they can “take for a ride”!

Never be fooled by such shenanigans. In 99.9 percent of cases these are crooked agencies looking to take advantage of the unwary. Trustworthy credit repair professionals will send their offers through various media only when you have asked to receive them.

4. Creating a “new identity” cannot be done legally. This is the “Big Lie” many people fall prey to, the reason being that it looks like the “magic solution” to all their difficulties. This idea is so widely accepted due to a general ignorance regarding credit repair. This illegal practice is called “File segregation” and will get you in deep trouble with the law!

A credit score is an aggregate of the history of your financial behavior from the day you became an adult until the present. Thus, it’s just not possible to get a “new” credit history. And if you do so, does it seem to you like this would be legal? Thus there’s no question that the credit repair companies that offer this “solution” are not legitimate.

5. If an agency wants full payment prior to rendering any services, look out! Under the Credit Repair Organizations Act you need to have a detailed written contract from the agency beforehand and that they cannot charge you a fee prior to completion of the services offered. You have the right also to cancel the contract within three days.

Some companies may charge an upfront fee for credit report analysis or a consultation, and thereafter charge monthly fees as they continue to work on improving your credit. However, if you are required to pay the complete charge before any services have been rendered, it may be because they are aware you will refuse to pay when it becomes obvious that their claims have been overstated. These kind of businesses are ripoffs and you must not deal with them!

6. Repairing credit is a lengthy process. As explained earlier, no reputable company is able to fix credit in a short time or delete derogatory accounts from your credit report if it is verifiable.

At best it takes two or three months to fix minor problems, by getting erroneous information deleted, and through improving how you deal with your finances. More serious negative trade lines like foreclosures and repossessions will remain on your report for seven years, even given exemplary management of your finances. Bankruptcies cannot be removed for ten years. Don’t fall for guarantees that such items can be removed within a month or less.

7. No contract, no deal! If you aren’t offered a contract look for another company; by law you have the right to insist on a written contract. Scammers are leery of presenting a contract, and if they do there will be information missing on aspects of the services, the fees charged, and the like. You will be able to understand the nature of these companies based on the nature of their contract. If they do not present you with a contract.

8. Do not trust any agency that guarantees results! Not even the best and most experienced agencies will guarantee anything as far as the results of their services. After looking at your credit report, they can promise to use all legal means to affect improvement in your score. But results cannot be guaranteed regarding credit repair.

Unfortunately, due to the nature of human beings, people believe what they want to hear and prefer to hire a company who tells them as much, instead of hiring a truthful company. Avoid this all too common self deception! Even though you would prefer to hear about guaranteed results, credit repair companies that guarantee results are ripoffs.

9. See if counseling services are offered. Most reputable credit repair companies provide them.

If the organization under consideration is not offering them, look a bit deeper. It may be a less than trustworthy company. All agencies of repute encourage and educate people on how to repair credit. Their services are for those matters that need continued and persistent follow-up toward improving the credit scores.

10. Bad advice? Beware! There are companies who will advise you to dispute all negative accounts on your credit report claiming “this is not mine..” While this may result in a higher credit score in the short term, the creditors whose loans have been disputed may later counter it, and it will later be verified by the credit bureaus.

Given the poor record keeping habits of the credit bureaus, it’s extremely likely that the details of any one trade lines contain errors. But credit repair companies that advise you to claim “this is not my account” if this is not truthful, are not to be trusted.

As you can see, there are plenty of red flags along the way to warn against possible fraud. Before anything else, before you hire credit repair companies it is to become knowledgeable regarding credit repair matters. Also learn about laws regarding credit repair and credit repair organizations before you go for any type of credit repair help. A good beginning is to visit the FTC Bureau of Consumer Protection website and the Ethical Credit Repair Alliance.

Filed under: Finance • Other Loans

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