Credit Repair Companies - Don't Get Scammed
The first thing you should look out for when searching for ethical credit repair services is the affiliations of the company you are looking at. Every reputable company will be eager to provide you with their references on request. Here are a few tips that you should keep in mind as protection against deceitful credit repair companies.
1. Make sure the company belongs to the Ethical Credit Repair Alliance (ECRA) or a similar organization. You It's often suggested to select companies who are members of the BBB (Better Business Bureau) when considering whether to hire a service. When looking for credit repair companies, those agencies that are members of the ECRA are some of the best.
This body has its own stringent codes of conduct and any member organization will represent your best interest. All credit repair companies who are members of this professional alliance will have to maintain high standards in their business practices. This means protection for you, the consumer, from being "taken" by a predatory scammer.
2. Know what credit repair is before seeking help. Most people who are cheated out of their hard earned money when hiring help with their credit, do not understand credit repair. You should be knowledgeable about what what these companies are able to do and what they are not able to do.
Only when you know clearly this difference, will you be able to distinguish those companies who offer you false promises. For instance, no one can remove negative remarks entered on your credit report if these can be verified. You will find many such credit repair companies claiming they can completely clean your credit report in as little as a month. Now think for a moment; can this be done without breaking the law? If the answer is negative are you sure you want to engage in methods that are illegal?
3. Avoid unsolicited offers you receive through email. At a time when you find yourself in financial desperation, don't think for a moment that it's good fortune that sent you such an e-mail. These kinds of e-mails come from fraudulent businesses who obtain your email address through various unethical methods, and send out e-mails by the millions hoping to "snare" someone in financial distress whom they can scam for all they're worth!
Never be fooled by such shenanigans. Most of the time these are unscrupulous thieves hoping to prey on the unwary. Honest credit repair companies will contact you by e-mail or US mail only if you have ask for them.
4. It is illegal to create a "new identity." This is one huge fallacy that many people choose to believe, primarily because it looks like the "Silver bullet" that will resolve all their difficulties. This belief is so prevalent because so little is understood about credit repair by the average person. But the problem is that this technique - called "File segregation" - is illegal! Your credit score is a summation of your credit history that goes back to the time you first became an adult. So acquiring a "new" history is an impossibility? So if you were to attempt it, doesn't it make sense that it can't possibly be legal? Thus there's no question that the credit repair companies that propose this as a solution to your difficulties are scammer.
5. Demanding complete payment upfront should raise a "red flag." Federal Law stipulates that the agency must provide you with a written contract and they must not collect fees until they have rendered their services. You may cancel the contract within three days.
A company may charge a fee up front for a consultation or analysis of your credit report, and then charge a fee every month as follow-up with the credit bureaus is continued on an ongoing basis. However, if you are required to pay the complete charge before any services have been rendered, they are likely doing so because they realize you're not going to pay them once you become aware that they can't perform as promised. Organizations such as these are fraudulent and you should avoid them like the plague!
6. Credit repair won't happen overnight. As we discussed, no reputable company can improve your credit score overnight or remove negative information that the credit bureaus verify.
At best the not-so-serious problems can be countered over 2-3 months time, by removal of mistakes, and by improving the way you handle your finances and overall payment of bills and loans. More serious entries such as repossessions and foreclosures will stay on your report 7 years, even given exemplary management of your finances. Bankruptcies can remain on your credit report for 10 years. If you are given guarantees of a fast removal, you can be sure of fraud.
7. Not given a contract? Look elsewhere! Many people will be saved from the pain of being defrauded if they insisted on a written contract; and according to the law, this is your right.
The ripoff artist are opposed to offering a contract, and if they do present one, there will be an absence of information on aspects of the services, the amount of the payments, and so on. You will learn a lot about these businesses by looking at the contract. If they do not offer a contract for any reason whatsoever, do not hire them.
8. If anything is guaranteed, beware! Not even the most experienced organization will guarantee anything as far as the results of their service they provide. They can realistically promise to use all legal means to improve your credit score. But to guarantee results is a different matter entirely.
However, the unfortunate reality is, people prefer to hire a organization when they are told what they want to hear, rather than hire a company who is telling the truth. Do not fall into this trap! 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. A good many credit repair companies will offer free counseling services.
If the organization under consideration is not offering them, look a bit beyond. It might be an organization unworthy of your trust. Reputable companies will educate their clients about repairing credit. The company performs those services that are for those matters that require professional expertise toward improving the credit scores.
10. Bad advice? Beware! There are companies who will advise you to dispute every derogatory account on your credit report by declaring "this is not mine.." Although this may result in short-term improvement in your credit score, the creditors whose entries had been disputed may later counter it, and it will later be verified by the credit bureaus.
Because the credit bureaus do a very bad job of keeping accurate records, the probability is very high that the details of any one trade lines contain errors. But credit repair companies that tell you to state "this account is not mine" even if it is, must not be trusted.
As you can see, there is no shortage of red flags to warn you against scams. Before anything else, before you hire credit repair companies it is to become knowledgeable regarding credit repair matters. In addition you need to educate yourself regarding laws pertaining to the credit repair business before looking for a credit repair company. A good beginning is to visit the web sites of the FTC Bureau of Consumer Protection and the Ethical Credit Repair Alliance.
1. Make sure the company belongs to the Ethical Credit Repair Alliance (ECRA) or a similar organization. You It's often suggested to select companies who are members of the BBB (Better Business Bureau) when considering whether to hire a service. When looking for credit repair companies, those agencies that are members of the ECRA are some of the best.
This body has its own stringent codes of conduct and any member organization will represent your best interest. All credit repair companies who are members of this professional alliance will have to maintain high standards in their business practices. This means protection for you, the consumer, from being "taken" by a predatory scammer.
2. Know what credit repair is before seeking help. Most people who are cheated out of their hard earned money when hiring help with their credit, do not understand credit repair. You should be knowledgeable about what what these companies are able to do and what they are not able to do.
Only when you know clearly this difference, will you be able to distinguish those companies who offer you false promises. For instance, no one can remove negative remarks entered on your credit report if these can be verified. You will find many such credit repair companies claiming they can completely clean your credit report in as little as a month. Now think for a moment; can this be done without breaking the law? If the answer is negative are you sure you want to engage in methods that are illegal?
3. Avoid unsolicited offers you receive through email. At a time when you find yourself in financial desperation, don't think for a moment that it's good fortune that sent you such an e-mail. These kinds of e-mails come from fraudulent businesses who obtain your email address through various unethical methods, and send out e-mails by the millions hoping to "snare" someone in financial distress whom they can scam for all they're worth!
Never be fooled by such shenanigans. Most of the time these are unscrupulous thieves hoping to prey on the unwary. Honest credit repair companies will contact you by e-mail or US mail only if you have ask for them.
4. It is illegal to create a "new identity." This is one huge fallacy that many people choose to believe, primarily because it looks like the "Silver bullet" that will resolve all their difficulties. This belief is so prevalent because so little is understood about credit repair by the average person. But the problem is that this technique - called "File segregation" - is illegal! Your credit score is a summation of your credit history that goes back to the time you first became an adult. So acquiring a "new" history is an impossibility? So if you were to attempt it, doesn't it make sense that it can't possibly be legal? Thus there's no question that the credit repair companies that propose this as a solution to your difficulties are scammer.
5. Demanding complete payment upfront should raise a "red flag." Federal Law stipulates that the agency must provide you with a written contract and they must not collect fees until they have rendered their services. You may cancel the contract within three days.
A company may charge a fee up front for a consultation or analysis of your credit report, and then charge a fee every month as follow-up with the credit bureaus is continued on an ongoing basis. However, if you are required to pay the complete charge before any services have been rendered, they are likely doing so because they realize you're not going to pay them once you become aware that they can't perform as promised. Organizations such as these are fraudulent and you should avoid them like the plague!
6. Credit repair won't happen overnight. As we discussed, no reputable company can improve your credit score overnight or remove negative information that the credit bureaus verify.
At best the not-so-serious problems can be countered over 2-3 months time, by removal of mistakes, and by improving the way you handle your finances and overall payment of bills and loans. More serious entries such as repossessions and foreclosures will stay on your report 7 years, even given exemplary management of your finances. Bankruptcies can remain on your credit report for 10 years. If you are given guarantees of a fast removal, you can be sure of fraud.
7. Not given a contract? Look elsewhere! Many people will be saved from the pain of being defrauded if they insisted on a written contract; and according to the law, this is your right.
The ripoff artist are opposed to offering a contract, and if they do present one, there will be an absence of information on aspects of the services, the amount of the payments, and so on. You will learn a lot about these businesses by looking at the contract. If they do not offer a contract for any reason whatsoever, do not hire them.
8. If anything is guaranteed, beware! Not even the most experienced organization will guarantee anything as far as the results of their service they provide. They can realistically promise to use all legal means to improve your credit score. But to guarantee results is a different matter entirely.
However, the unfortunate reality is, people prefer to hire a organization when they are told what they want to hear, rather than hire a company who is telling the truth. Do not fall into this trap! 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. A good many credit repair companies will offer free counseling services.
If the organization under consideration is not offering them, look a bit beyond. It might be an organization unworthy of your trust. Reputable companies will educate their clients about repairing credit. The company performs those services that are for those matters that require professional expertise toward improving the credit scores.
10. Bad advice? Beware! There are companies who will advise you to dispute every derogatory account on your credit report by declaring "this is not mine.." Although this may result in short-term improvement in your credit score, the creditors whose entries had been disputed may later counter it, and it will later be verified by the credit bureaus.
Because the credit bureaus do a very bad job of keeping accurate records, the probability is very high that the details of any one trade lines contain errors. But credit repair companies that tell you to state "this account is not mine" even if it is, must not be trusted.
As you can see, there is no shortage of red flags to warn you against scams. Before anything else, before you hire credit repair companies it is to become knowledgeable regarding credit repair matters. In addition you need to educate yourself regarding laws pertaining to the credit repair business before looking for a credit repair company. A good beginning is to visit the web sites of the FTC Bureau of Consumer Protection and the Ethical Credit Repair Alliance.
posted by Money Meister | 7:42 PM
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