Being in debt is an overwhelming time and it can sometimes feel like there’s no way out. If truth be told, you’re probably desperate to get out of your debt. Luckily, there are strategies and processes you can follow to help you recover. However, we are often vulnerable when we have high debt which makes us more likely to fall victim to scams. Therefore, be careful you don’t let your concerns cloud your judgment when dealing with a credit repair company.
How to Spot a Credit Repair Company Scam?
Sadly, there are many people out there who like to prey on others. Perhaps they’ve suffered and want to pass on that suffering. Regardless, scams happen and an increasing amount of people are becoming victims. Don’t ever feel guilty or bad about these things happening to you though because these fraudsters are getting cleverer. There’s a reason we all have a sophisticated junk folder.
When it comes to dealing with a credit repair company though, here are some telltale signs:
Your Rights
In the US, the Credit Repair Organization Act is a federal law that exists to protect you from scam companies. In terms of you the consumer though, the main thing you need to remember is that a credit repair company is legally obliged to let you know that you can follow all their services on your own. You can actually get your credit report from the credit bureaus yourself. Afterwards, you can follow a dispute process on anything you don’t agree with that’s in your report. There are only three bureaus to follow up with: Experian, Equifax and TransUnion.
Of course, following the process, yourself can be tedious and overwhelming. In contrast, a credit repair company can do this on your behalf with the years of expertise they’ve developed when it comes to legal language. Also, many offer financial advisory services so that they can help you develop a strategy to improve your approach to money. This means that you can become your own master moving forwards.
Contract
Another aspect of the Act is that a credit repair company is legally obliged to provide you with a contract before carrying out any services. This covers what you’ll have to pay as well as an estimate of timings and a cancellation process. It’s all about making sure that everything is as transparent as possible. In addition, make sure that there’s no reference that would waive your rights. Having said that, the Act doesn’t accept any waivers and deems them unenforceable.
Fees
Again, the Act forbids any credit repair company from charging upfront fees. In fact, you’ll soon see that some companies take this one step further. Those ones promise to not charge you if they don’t get any results for you. That approach clearly shows confidence and professionalism.
False Claims
A credit repair company cannot change legitimate issues on your credit report, regardless of what they tell you. Some scam companies might also ask you to lie or change your identity on your credit report. This is clearly fraudulent and you could also find yourself in a lot of trouble.
In terms of a successful track record, a credit repair company can give you examples of how they helped previous customers. However, they cannot preempt your outcome without going through the process first because they simply can’t guess at what’s on your credit report.
What to look for in a Reputable Credit Repair Company?
One of the key things to look for in a reputable credit repair company is that they are certified with the Department of Justice. This is actually required by the Act but many don’t follow this with the assumption that consumers don’t know about the Act. Furthermore, you can look the company up on the Better Business Bureau (BBB) website. It’s worth noting though that a credit repair company can get a rating but they don’t have to seek accreditation. A good rating is more than good enough.
Finally, and this comes down to personal choice, but there are companies out there who offer more than just credit repair services. Some offer loan services as well as financial education and credit strategy support.
Parting Advice for dealing with a Credit Repair Company
Facing debt and feeling controlled by it is a frightening experience. Have faith though because there is a process and a strategy that can help you get out of it with time. The huge benefit of working with a credit repair company is that they take the emotion out of it. They work with you to clean up what they can on your credit report and to plan for a better future money approach. Make sure you don’t let your concerns about debt cloud your judgment though and look for the credit repair company’s certification, track record and contract structure. Finally, listen to your instinct. If something sounds too good to be true then it probably is.
