You would be considering credit repair when you have an average or poor credit score. Your credit history may have been adversely affected for some reason or several reasons and you want to fix it. The last thing you need at such a juncture is a credit repair scams. Unfortunately, many credit repair companies do not offer any worthwhile services and there is no tangible effect on your credit score. You would be parting with your hard earned money and your hopes would get dashed sooner than later. You should know everything about credit repair scams to protect your interests and your money.
Common Attributes of Credit Repair Scams
You may receive a cold call from a credit repair company or one of the call centres it has hired to generate leads. You may voluntarily reach out to a credit repair company to hire its services. Regardless of who takes the initiative, you should watch out for the red flags. Here are some of the common attributes of credit repair scams.
Many credit repair service providers require you to pay for their services upfront. This is even before they have started working on your file. You should never pay upfront. Companies using telemarketing and asking for upfront payment are in violation of Telemarketing Sales Rule. This is a federal law. No credit repair company can request or accept any payment till such time they provide you a credit report that clearly reflects the results you were promised. This usually takes six months after the corrective measures or acts of remediation.
In other words, a credit repair company must do what it has to and then wait for at least six months for the changes to take effect on your credit history. Only then would you be able to actually see if your credit score has indeed improved. You should not pay any money before you have this proof. Some credit repair companies will break down the total cost into easy instalments and you would be asked to keep paying over a period of six months or twelve months. This is also in violation of the federal law as the services are not yet rendered and the results are not attained or proved.
Instant Credit Repair
Some credit repair agencies or counsellors will advertise that they can instantly improve your credit score. This is simply not possible. Credit history is always reviewed over time. While a negative impact can be instantaneous, a positive review will take months. The only way you can have a more immediately positive impact on your credit score is repaying your existing loans in a timely manner, resolving bad debts without settling and maintaining a financial profile free of all types of blemish. Credit restoration services will not help you with any such remedy and hence there is no overnight reversal of poor credit scores.
Dispute all Accurate Information or Records
Some credit repair services urge their clients to dispute all accurate records and information on their credit history. This is unwise. Accurate information should never be disputed. Only inaccurate records must be disputed and those are the details that can be removed from a credit history. You cannot remove an accurate record that is fairly recent. If you have a debt or you have failed to repay a loan and that is listed on your credit history, a counsellor or credit repair company cannot have that removed. The only way such details would get removed is naturally at the end of the seven year term, when all bad debts are supposed to fall off the report.
Limited Information, No Rights Explained
All credit repair companies are legally bound to provide you free information and you should have a lucid understanding of your rights. A credit repair company that fails to convey to you what your rights are or is unwilling to share any information unless you pay the upfront fee is basically running a scam. You should not only avoid such companies but also report them. A reputable credit repair company will always help you to understand the Credit Repair Organizations Act and your rights as guaranteed by the Fair Credit Reporting Act. You should remember that disputing a record on your credit history is your right and it can be exercised for free. There is nothing you need to pay for this and you don’t necessarily need a credit repair company to facilitate such a process.
Correspondence with Credit Bureaus Prohibited
Many credit repair companies recommend their clients not to contact the credit bureaus or agencies. Some of these companies are more blatant and they would stringently prohibit any correspondence. As a citizen, you have the right to contact any credit bureau or reporting agency. You can discuss anything related to your credit history with such agencies. No one can prevent you from doing so and it does not matter how bad your credit score is. Those running credit repair scams prohibit such communication as you would get to find out the truth about them.
No Refund or Rethink
As a citizen, you have the right to rethink and seek a refund from a credit repair company within the first three business days from signing up. Any credit repair company that denies you this refund is in violation of federal law. You should not have to bear any charge. There cannot be any processing fees or consultancy charges. You must get a full refund from the credit repair company if you cancel the service contract in three business days.
Hire a Reputable Credit Repair Company
Hire a reputable credit repair company, like Sky Blue Credit Repair, that is forthcoming with all the information you need before you pay anything. Look for a company that reiterates its commitment to show you proof of progress and the actual improvement of your credit score to be deemed eligible for payment of their services. A reputable credit repair company will never oversell. It would always explain you all the rights and the processes with utmost diligence. You would also not hear tall claims and unsubstantiated tales.