Find A Legitimate Credit Repair Company To Fix Your Bad Credit
Legitimate Credit Repair Service Companies To Fix Your Bad Credit
It’s reported that by the end of 2007, Americans owed more than $915 billion in credit card debt, and the credit crunch is clearly impacting consumers as lenders are tightening the rules that decide who gets loans and who doesn’t. Given the stricter loan and credit requirements, some companies are using the credit crunch to take advantage of consumers by promising bogus credit repair services that can be costly and in some cases illegal. Before I go even further, though, I want to stress that everything a credit repair company can do for you legally, you can do for yourself at little or no cost. Of course, I understand that some people would rather have professionals handle their situations. I happen to also fall into that category and can totally relate to them. The information on this page is thus intended to help you find legal, legitimate credit repair companies, by helping you understand the very basics of what can be lawfully achieved through credit repair.
Issues with credit repair organizations
Complaints about credit repair companies have risen for three straight years, topping more than 1,400 in 2006 – a 38 percent increase since 2004. More than 400 of them were not resolved, meaning BBB was not able to track down the company or the company refused to take steps to resolve the issue with the consumer.
“With the economy slowing and lenders becoming increasingly picky, many people are looking for fast, easy ways to fix or even erase damage to their credit history” said Steve Cox, spokesperson for the Better Business Bureau (BBB). “People need to be very careful when searching for or using a credit repair agency. In some cases consumers are being charged for work they could have done on their own for free, and in the worst case scenarios, consumers are unwittingly encouraged to engage in illegal activities.”
What credit repair can’t do
Offers for miraculous credit repair are common in radio, television, newspaper and direct mail advertising. The Internet is home to countless credit repair sharks, some requiring consumers pay large fees upfront – upwards of $1,500 – and in return may promise to erase any blemishes on credit records, get new Social Security numbers for clients, or allow consumers to piggyback on someone else’s credit record.
Repairing credit reports takes time and effort. Any company that suggests they can fix your credit in under 30 days is a fake. Any company that guarantees that they can fix your credit report is a fake. No legitimate provider of credit repair services can guarantee anything until they have looked at your credit reports to assess what, if any, negative information they contain.
There is no one, and no credit repair company, that can remove accurate information from your credit report. This is true whether they are lawyers, paralegals, accountants, or anyone else. Only items that can be proven false or out of date can be removed from credit reports. Furthermore, it’s nearly impossible to get a new Social Security number, and piggybacking on someone else’s credit can be construed as loan fraud. Legitimate credit repair centers around removing inaccurate, out of date, and unproven items from your credit reports. Any company that suggests you apply for a new social security number or name change is a fraud. Doing so is illegal.
The practice of Piggybacking
Piggybacking has become a popular way for people with no credit or bad credit to increase their credit score. Piggybacking involves being added as an authorized user to an account maintained by a person with good credit. Often, parents will make their child a joint user of their credit card which helps the child build a credit history. The flip-side of piggybacking is that credit repair services have cropped up that allow and encourage people to essentially “sell” their good credit to people with poor credit by making them authorized users on their accounts. In order to discourage this practice, when determining credit scores, FICO 08 (the new version of the FICO score) will not consider accounts where the consumer is only an authorized user. Parents can still make their child an authorized user of a credit card, but the child’s own FICO score will not be affected.
Errors on credit reports
Americans find nearly 13 million inaccuracies on their credit reports each year. With millions of inaccuracies in credit reports, you should check your credit score at least once a year. Everyone is entitled to a free copy of their report from all three credit reporting bureaus every year (that’s three separate reports) or if they have been denied credit within the last 30 days (go to www.AnnualCreditReport.com). If you’ve already used up that possibility, then you basically have to buy your reports.
The law allows you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for this. You can dispute mistakes or outdated items for free. Ask the credit reporting agency for a dispute form or submit your dispute in writing, along with any supporting documentation. It’s also good to keep in mind that everything a credit repair company can do for you legally, you can do for yourself at little or no cost.
Free credit report frauds
Under the Fair and Accurate Credit Transactions Act of 2003 everyone is entitled to one free credit report per year per Consumer Reporting Agency. There is only one place to request these credit reports: www.AnnualCreditReport.com. However, fraudulent companies continue to proliferate the Internet, demanding payment for reports and/or automatic signup to credit repair programs. These websites and programs are not legitimate. It’s one thing to buy a report; it’s another thing entirely to be offered a “free” credit report and THEN find out that getting said report automatically enrolled you in some credit repair or monitoring program. And as a final precision, while your credit report can be free under certain circumstances (as previously underlined), your credit score is never free. That’s an important distinction.
How to find a legitimate credit repair company that will help improve your credit
If you seek or respond to a credit repair offer you need to be aware that, by law, credit repair organizations must provide you with a copy of the “Consumer Credit File Rights Under State and Federal Law.” This one-page document outlines your rights in disputing inaccurate information on your credit report, and also addresses your rights in dealing with credit repair companies. A key point is that you have the right to cancel a contract with any credit repair organization for any reason within three business days from the date you signed the contract.
Companies must also provide a written contract that spells out your rights and obligations. You should read these documents carefully before signing anything. Beware of companies that:
• Do not tell you your legal rights and what you can do – legally – for free;
• Recommend that you not contact a credit bureau directly;
• Want you to pay for credit repair services before any services are provided;
• Advise you to dispute all information in your credit report;
• Take any action that seems illegal, such as creating a new credit identity by obtaining a federal employer identification number to use instead of a social security number;
• Offer to let you “piggyback” on other consumer’s good credit.
Before contacting a credit repair service, check them out first with BBB by easily accessing BBB Reliability Reports free of charge at www.bbb.org.
If you have serious credit problems, Consumer Credit Counseling Services (CCCS) are available for a low fee or, in some cases, for free. Some of the services provided may include working out a payment plan with lenders, as well as guidance and advice to help consumers make more financially sound decisions in the future. To find the nearest CCCS office, call toll-free, 800-388-2227, or go to www.nfcc.org.
Credit repair can be a difficult and confusing process. Legal credit repair services do not engage in making false promises, suggesting illegal practices, or skirting the rules governing legal credit repair services as contained in laws, Acts and rules such as the those defined by the Credit Repair Organizations Act.
There are steps everyone should take before hiring any company to repair their credit. They include:
1) Only hire a legitimate credit repair company that provides you with a working telephone number and company office address.
2) Check the history of the company through the Better Business Bureau website. Type the name of the company and it’s address into the BBB search webpage.
3) Ask for legitimate references. Do not only rely on ‘testimonials’ provided on the website.
4) Do not pay one cent until you’ve received the credit repair services agreement in writing, and have read through it carefully.
Finally, when considering professional credit repair services, consider using a company that employs lawyers or paralegals who understand the laws and rules that govern the industry.
Legitimate Credit Repair Service Companies To Fix Your Bad Credit
June 7th, 2008 at 5:42 pm
Also a good recommendation is to check if they are listed with the National Association of Credit Services Organizations by doing a company search at http://www.nacso.org
June 7th, 2008 at 5:55 pm
Thanks Dominic. I checked out the NACSO’s website. I had no idea such an organization existed. From their website, I pulled their membership requirements. Some pretty stringent stuff:
Before a company is approved by the National Association of Credit Services Organizations, they must meet the following requirements:
* Provide information and background on company and its officers.
* Not have multiple unexplained complaints through miscellaneous resources.
* Adhere to guidelines set forth by appropriate governing agencies.
* Submission of website and content for review.
* Submission of pictures of office space.
* Not use any deceptive advertising or make false claims. If scripts are used, they will be reviewed.
* Not have any current legal or government actions against them that demonstrates a significant failure of the company to support the standards and principles of the NACSO. NACSO can rescind membership to an existing member if it proves they are not acting within the scope of NACSO Standards of Excellence.
* Have complete and conformed integrity and support the standards and principles of NACSO.
* Not engage in any activity that would compromise status with NACSO.
* Provide adequate client support options, including support phone numbers and email addresses.
* Been in business for at least one year. However, if the principals are known to the NACSO or can prove they have standards that the NACSO would approve, this condition can be waived at the sole discretion of the NACSO.
* Be current on membership dues.
Very good stuff… Thanks again Dominic