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Avoiding credit repair scams

We're sure you've heard them.....

• We guarantee to remove bad credit
• We can get anything deleted
• We can get you a new file-legally!

These are all claims to be suspicious of. The fact of the matter is no one can guarantee those results. Furthermore some of the techniques are illegal. There are many good companies who assist debtors' and consumers' in resolving credit and debt issues but none would make such exaggerated claims if they are legitimate.

The Internet is proliferated with so called "credit specialists" but in reality they offer nothing more than false promises and phony guarantees. Be suspicious of exaggerated claims and...

Know the warning signs

• Company or individual claiming to be credit restoration specialists and are extremely anxious for your business and very diligent in convincing you of how great they are.

• Offer little in explaining "Your Rights."

• Start talking about your fees immediately and don't really seem to be listening to your questions.

• Supply little in the way of communicating your case.

• Does not explain your full rights under federal law.

• Has a very difficult to understand contract.

• Asks for large upfront sums of money before anything has been done.

A reputable company will charge monthly or as the work is performed and allow you to cancel if you're not happy with no further obligation.

Complete CROA- Credit Repair Organization Act
Complete FCRA- Fair Credit Reporting Act

The truth
You can prepare yourself to handle if not all, most of your problems with credit repair. The only time you should ever hire someone to do it for you is if you are not interested in doing it yourself or afraid you may make your credit worse. You also may want a more experienced person to handle your credit disputation process. Fine. Just be sure you trust the company and know they are operating legally and with a good history.

Ask questions!
The best way to find a good company is to look for a company that is licensed and in good standing under the guise of the Credit Repair Organization Act* (CROA). Anyone can throw up a sign, website, few flyers and claim that they are the BEST in Credit Restoration. Just don't get sucked into the hype. Make informed decisions and always trust your gut instinct. If they make it sound easy and to good to be true, it probably is. You need to be aware that there are fallacies about Credit Restoration. If you have true inaccuracies, errors or misinformation in your files then use the laws that protect you. If you have tried and cannot get bureau cooperation then look into the information available through your Attorney General & Federal Trade Commission. People are so desperate for help that they blindly assign their credit history to anyone for a quick fix.

Stay involved
If you do decide to hire a credit repair attorney then don't stop there. Stay involved in the process and ask that they keep you informed of their progress every step of the way. If it's a good company, they should have no problem keeping you in the loop. If they avoid your calls and don't answer your questions in a straight forward manner, ask for a refund.

The Federal Trade Commission on Credit Restoration Scams
Do yourself a favor and save some money, too. Don’t believe these statements. Newspapers, radio, TV, and the Internet are filled with ads that offer—for a fee—to erase accurate negative information in your credit file so you can get a credit card, auto loan, home mortgage, or even a job. The scam artists who run these ads can’t deliver.

Only time, a deliberate effort, and a personal debt repayment plan will improve your credit. The companies that advertise Credit Restoration services appeal to consumers with poor credit histories. Not only can’t they provide you with a clean credit record, they may be encouraging you to violate federal law. If they ask you to make false statements on a loan or credit application, misrepresent your Social Security number, or advise you to get an Employer Identification Number from the Internal Revenue Service under false pretenses, you will be committing fraud.

You can help yourself to rebuild a better credit record. Start by contacting your creditors when you realize that you are unable to make payments. If you need help working out a payment plan and a budget, contact your local credit counseling service. There are nonprofit groups in every state that offer credit guidance to consumers. These services are available at little or no cost. Also, check with your employer, credit union, or housing authority for no-cost credit counseling programs.

In addition, you have specific rights under the Fair Credit Reporting Act*. You are entitled to a free copy of your credit report if you’ve been denied credit, insurance or employment and request the report within 60 days of notice, or if you can prove that (1) you’re unemployed and plan to look for a job within 60 days, (2) you’re on welfare, or (3) your report is inaccurate because of fraud. If your application for credit, insurance, or employment is denied because of inaccurate or incomplete credit information, the company to which you applied must give you the name and address of the reporting credit bureau. There is no charge to dispute mistakes or outdated information on your credit record. Ask the credit bureau for a dispute form and submit it with any supporting documentation.

Additional State Protection
Most consumers are aware of the CROA- Credit Repair Organization Act but some states provide additional protection.

Arkansas- must allow five (5) days to cancel. The standard is three (3).

California- must give you five (5) days to cancel and must perform work promised within 90 days. Whatever the contract promises must be done within 90 days. This is to help prevent credit repair clinics from dragging their feet to make more money off of you.

Colorado- must allow five (5) days to cancel.

Florida- must allow five (5) days to cancel.

Georgia- this state prohibits "credit repair clinics". This does not include lawyers acting as your counsel who also repair your credit.

Hawaii- this state prohibits "credit repair clinics". This does not include lawyers acting as your counsel who also repair your credit.

Louisiana- must allow five (5) days to cancel.

Michigan- must allow five (5) days to cancel.

Minnesota- must allow five (5) days to cancel.

Nevada- must allow five (5) days to cancel.

Oklahoma- must allow five (5) days to cancel.

Utah- must allow five (5) days to cancel.

Wisconsin- must allow five (5) days to cancel.

Some portions courtesy: FTC.GOV