Friday, November 6, 2009

Credit Repair Companies - Ten Things to Look For

The first issue you need to watch for when you're looking for reputable credit repair services is the affiliations of the business you chose for this purpose. Every reputable company will be happy to provide you with their references on request. These are some important issues 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 another reputable regulatory body. You You are often advised to hire companies that are subscribed to the BBB (Better Business Bureau) when you are looking for any type of service. However, in the case of credit repair companies, those companies that are members of the ECRA are some of the best.

This organization requires that its members agree to a stringent code of professional ethics and any business that gets their approval will do their work in the client's best interest. All credit repair companies who are members of this organization must maintain high standards of ethics in their business practices. This means protection for you, the consumer, from any type of unethical and sub-standard practices.

2. Learn a bit about what credit repair is before looking for assistance. Most people who are cheated out of their hard earned money when hiring help with their credit, do not know anything about what repair of credit involves. You should be knowledgeable about what what credit repair services can do for you and what they can't do.

Only if you know the difference, can you identify which organizations are reputable. For instance, no one can remove negative remarks entered on your credit report if these can be verified. There are those credit repair companies claiming they can completely clean your credit report in as little as a month. Think this over carefully for a moment; is this even possible to do legally? If you answer "No" 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 e-mails are sent by scammers who use shady methods to get your e-mail address, and send out e-mails by the millions trying to fool some needy soul whom they can "take for a ride"!

Don't be taken in by such tricks. These are usually always these are unscrupulous thieves hoping to prey on the unwary. Reputable credit repair professionals will make their offers by e-mail or US mail only after you have asked to receive them.

4. Creating a "new identity" is illegal. This fallacy is believed by many people, mainly because it would seem to solve all their problems. This idea is so widely accepted due to a general ignorance regarding credit repair. This is called"File segregation." Avoid it like the plague - it's illegal! A credit score is an aggregate of the history of your financial behavior from the day you became an adult until the present. So acquiring a "new" history is an impossibility? And if you do so, does it seem to you like this would be legal? So it's glaringly obvious that the credit repair companies that offer you such a way out of your problems are fraudulent.

5. If an agency wants full payment prior to rendering any services, look out! Under Federal Law the company provide you a written contract upfront and that they cannot charge you a fee prior to completion of the services offered. In addition you have three days to cancel the contract if you so choose.

A credit repair business can ask for an upfront charge for initial services, such as a credit report analysis, and then charge a fee every month as follow-up with the credit bureaus is continued on an ongoing basis. But if a company demands their entire fee be paid in advance, they are likely doing so because they realize no payment will be forthcoming when you realize that their claims have been overstated. These kind of businesses are ripoffs and you must not deal with them!

6. Repairing your credit score and credit report takes time. As stated previously, no honest agency can solve your credit problems in the blink of an eye or change your credit history entered on the credit report if it can be verified.

In a best case scenario, less serious issues can be fixed within two or three months, by disputing information that is incorrect, and by improvement in your financial habits. More serious issues such as 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. Any company that guarantees quick removal of such items is not to be trusted.

7. No contract? Forget it! Many people will be saved from the pain of being defrauded if they insisted on a written contract; this is your legal right.

Scammers are leery of presenting a contract, and if a contreact is given, important information will be missing in regard to the services, what the fees are, and the like. You will better understand these organizations by the contract they offer you. If they do not offer a contract for any reason whatsoever, go find someone else.

8. If anything is guaranteed, beware! Not even the best and most experienced agencies can guarantee the results of their services. They may reasonably promise that all legal procedures will be used to improve your credit. However, in the credit repair business there can never be any hard core guarantees in regard to results.

However, the unfortunate reality is, most people are more inclined to believe - and to hire - an agency that tells them what they prefer to hear, instead of hiring an agency that is truthful. Avoid falling prey to this trap! Even though promises of results are more appealing, credit repair companies that offer guaranteed results are fraudulent.

9. See if there are counseling services. Many good credit repair companies offer counseling services at no charge.

If the agency you are looking at does not, look a bit further. It may be a less than trustworthy company. Reputable companies will educate their clients about repairing credit. The company performs those services that are for those matters that require professional expertise to improve one's credit.

10. Bad advice? Beware! Some organizations will dispute all negative trade lines on your credit report claiming "this is not my account.." Even though in the short term the credit score may improve, the creditors whose trade lines were disputed may later counter it, and it will later be verified by the credit bureaus.

Given the shabby record keeping on the part of the credit bureaus, it's extremely likely that there are inaccuracies on your credit report. But credit repair companies that advise you to claim "this is not my account" if it in fact is yours, cannot be trusted.

As you can see, there is no shortage of red flags to warn against possible fraud. Before anything else, before you hire credit repair companies is to be informed in regard to credit repair, and terms like "credit score" and "credit report". You also need to know the minimum applicable laws before you go for any type of credit repair help. For starters visit the web sites of the FTC Bureau of Consumer Protection and the Ethical Credit Repair Alliance.

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