How To Find Legitimate Credit Repair Companies (& Avoid Scams)
You’re trying to get your finances in order to complete your estate plan and, sometimes, this involves repairing your credit. But how do you know whether the company you’re dealing with is one of the legitimate credit repair companies…or just a scam?
Nobody wants to be conned out of their hard-earned money. After all, you’re trying to get your finances in order! So when you’re looking to rebuild credit, you want to work with a reputable credit repair company who will fix your credit without getting you in trouble with the law.
Do Credit Repair Companies Work?
Before you shell out money to just any credit repair company, it’s important to know how credit repair companies work.
Credit repair companies aim to fix bad credit scores by having inaccurate actions (i.e. those that you did not take) removed from your credit report if you were the victim of identity theft. Credit repair services cannot help you if you have a low credit score because of your own financial mistakes.
All credit repair companies are regulated by the Credit Repair Organizations Act, which was signed into law in 1996. This law was created to protect you, the consumer, from illegal actions and other scams. Credit repair companies don’t have any extra privileges that you don’t. In fact, you could perform the same credit repair services on your own with an internet connection or a cell phone.
So why would you want to hire one? Are there any legitimate credit repair companies?
For some people, fixing a bad credit score goes above and beyond disputing a charge on their credit card. For victims of identity theft, this could mean hours on the phone trying to contact agencies, provide them with documentation, and tracking down every loose credit card you have.
For these situations, hiring legitimate credit repair companies is often the best way to have the problem taken care of by people who know what they’re doing.
If fixing a bad credit score sounds like too much work for you, hiring a company to fix bad credit is a solid option. But it’s important to only work with legitimate credit repair companies who won’t expose you to additional legal problems.
How Do I Know If I’m Being Scammed?
Scammers and con artists abound in any industry, and credit repair is no different.
Signs of a Scam
While you’re carefully considering your options, watch out for the following signs that a credit repair company is running a scam or illegal operation:
- They ask you to pay (even a down payment) before they do any work. Under the Credit Repair Organizations Act, this is ILLEGAL. Never pay upfront!
- They don’t disclose your rights to do this work for yourself or to cancel the contract within three days.
- They ask you to dispute accurate information on your credit report and/or promise to remove accurate information that is damaging your credit. No legitimate credit repair company will ask you to lie in order to fix your credit score.
- They tell you how they plan to fix your credit before reading your credit report.
- They offer to delete your credit report. No one can do this.
- They give you a “credit profile number” or “employee identification number” to use when you apply for credit. Many times, these are stolen social security numbers. If you use them, you could face criminal charges.
If you feel that you have been the victim of a credit repair scam, start by reporting the company to your state’s Attorney General, the Federal Trade Commission, the Better Business Bureau, and the Consumer Financial Protection Bureau.
Signs of a Legitimate Company
On the other hand, look for these signs of a legitimate credit repair company:
- They consult with you regarding your unique circumstances (and even read your complete credit report) before telling you how they plan to fix it.
- They don’t keep their credit repair services a secret or pretend that they are the only company that can help you.
- They don’t make any guarantees that your credit score will increase by a certain number of points.
- Their contract stipulates exactly what will be done, how much they’re charging, and your legal rights and you are allowed to go over it before you sign it.
To help you find some legitimate credit repair companies, ConsumersAdvocate.org put together a list of the top 10 credit repair companies of 2017 so you can find the company that’s right for you.
Credit repair companies are for victims of identity theft, but this doesn’t mean that you have to hire one. If you have time and are well-organized, you can repair your credit score yourself, but if this becomes too much work, that’s when a credit repair company can step in.
Remember that legitimate credit repair companies will never ask you to lie or pay upfront to fix your credit and they will disclose their methods as well as your rights. Steer clear of any company that asks you to pay before services are rendered or any company that asks you to dispute accurate information.
Of course, if your low credit score is a result of your own less-than-stellar financial doings, free credit repair is simple: use your credit cards, but pay them off in full every month. Over time, your credit score will increase.
It’s the long-term solutions that are the most effective.