What You Should Know About Credit Repair Companies

Published: September 13, 2012 by Maxine Sweet

Unfortunately, many people have received poor credit advice and been taken advantage from credit repair companies.

Many people don’t realize that there isn’t anything that a credit repair service is able to legally do for you that you can’t do yourself for little or no expense.

In 1997, a federal law was created as a response to the number of people who have suffered from a consumer repair scam.

Under this act, credit repair companies:

  • Are prohibited from taking consumers’ money until they fully complete the services they promise
  • Are required to provide consumers with a written contract stating all the services to be provided and the terms and conditions of payment. Under the law, consumers have three days to withdraw from the contract
  • Are forbidden to ask or suggest that you mislead credit reporting companies about your credit accounts or alter your identity to change your credit history
  • Cannot knowingly make deceptive or false claims concerning the services they are capable of offering
  • Cannot ask you to sign anything that states that you are forfeiting your rights under the Credit Repair Organizations Act. Any waiver that you sign cannot be enforced

Quality credit counseling services are often non-profit and charge little or no fee for their services. Look for non-profit credit counselling organizations in your area if you need help. They will offer, and in some cases require, that you complete budget training and money management courses as part of their non-profit programs.

If all a credit counselor offers is to negotiate a debt repayment plan or to set up a “debt consolidation” plan, look elsewhere.  Unless you also learn to manage your credit, you will end up with the same problems or find yourself even deeper in debt in the future.

As always, you can always work directly with us to dispute lender debts on your credit report.  It’s completely free to report errors with us and you can get started right now on our simple app.

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Photo:  Shutterstock

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