It is too bad that credit repair has gotten the bad rap that it has. Credit repair does work and so do legitimate credit repair companies.
However, just like many aspects of the financial services industries including mortgages, bankruptcy, credit cards, and automobiles to name a few there are many hidden agendas in sales built around the idea that consumers just do not know what is right and what is wrong nor do they understand how to get things done for themselves.
Perhaps our collective naivity is a function of the U.S. consumerism way of thinking of "just hire someone to do it", or there are really tricks to these trades, but many people take advantage of what we don't know - and in some cases what we don't know that we don't know for their own gain and the credit repair industry is no different.
A Bad Credit Repair Company May Offer The Following Services
Guaranteed Results - If a credit repair company offers a guarantee to improve your credit history - credit report - or credit scores - run from them. You may even want to report them to your state's attorney general and certainly to your Better Business Bureau. There are too many variables in the credit repair business to be able to guarantee anything. See more information on factors that affect how well credit repair works.
Dispute Anything On Your Credit Report - Good credit repair companies do not dispute everything on your credit report. In fact, reputable credit repair companies are not supposed to challenge legitimately reported negative information for the sole intention of improving credit reports thus improving credit scores. Inaccurate information is the intended target of legitimate credit repair. You may be tempted to have legit information removed from your credit report - but expect that information to return within the next few months after its removal.
A Contract Without Offering Your Rights And What You Can Do For Free - There are many things you can do yourself to repair your credit report. Some of these just include challenging errors on your credit report yourself. If they are legitimate errors and you can provide proof credit bureaus and creditors are receptive to making corrections. If you think you have been wronged by a creditor there are number U.S. Consumer Protection Laws like the the Fair Credit Reporting Act (FCRA), the Fair Credit Billing Act (FCBA), Credit Repair Organizations Act (CROA), and the Fair Debt Collections Practices Act (FDCPA) that are designed to protect you.
Look for your credit repair company to council you on what you can do to help yourself before you pay someone else to do it for you. It is okay to have someone else do it for you, but giving you the choice is a respectable business practice.
Create A New Credit Identity - This one is a no - no. You are who you are. Unscrupulous credit repair companies may offer that you should get a employer identification number or use fraudulent information to obtain new credit. Do listen - this could land you in jail or paying a lot of fines or both.
Upfront Fees Required Before They Start Working - Companies are supposed to do something for you before they get paid. If you are asked to pay a large sum of money up front - duck your head, run and hide from these people. Companies also are not allowed to force you to pay first before they do anything. You may pay them upfront, but they are not allowed to force you to do so before they start working.
If you find yourself facing any of these offers by a credit repair company and you haven't signed a contract with them you ought to consider finding a new company to work with. Improving credit and credit scores through credit repair methods employed by a legitimate credit repair company can produce great results. Remember this: if you have a bad feeling find another company. It is no fun getting scammed.
