Are Credit Repair Services All They are Cracked Up to Be?

If you have bad credit you know all too well the problems it can cause in life. Not only can it prevent you from getting a loan, it may keep a landlord from renting you an apartment, or an employer extending a job offer. You will probably pay more for car insurance, regardless of your actual driving record.

No doubt you have seen countless ads by credit repair companies claiming they can make all your credit troubles go away. Bankruptcy, judgments, liens? No problem?they?ll get that wiped out in a jiffy. Your score will skyrocket, and all will be right in your financial world.

But is it really that easy? Are these legitimate services or just a bunch of scammers preying on desperate people? The short answer is that, yes… given the right service provider. But how do you find a firm that can do this right?

To start, you need to have a better understanding of how the process works along with how to spot the bad apples.

What Credit Repair Services Can Do for You

If you are hoping that a company can get all your negative information removed, leaving you with a pristine credit history, sorry to burst your bubble. It just doesn?t work that way. But, that does not mean there is no hope. There are several instances where credit repair really can help people.

1. If there are legitimate mistakes on your credit report, you have the right to get them fixed.

2. All details on your credit report need to be verified, and if there is any information on there that can?t be, the credit agencies must remove it from your report. For example, if a business reported you to a collection agency for an unpaid debt, and it is showing up on your report, but the company has closed down, there is no way to confirm if it is a legitimate claim.

3. Credit repair agencies often try to negotiate with lenders on your behalf, and if the company is willing to engage, your credit score may get a nice boost.

4. If there is still information on your report that should no longer be there because a certain amount of time has passed, it needs to be removed. For example, an unpaid credit card debt that is more than seven years old.

Accurate information cannot be removed. For example, a bankruptcy typically stays on a credit report for 10 years?if yours was just 18 months ago, there is no way it is getting scrubbed.

Finding Legitimate Companies

So, now you have a better understanding of how credit repair works. Your next task is separating the wheat from the chaff and finding a legitimate company. Generally speaking, it is good to go with law firms, such as, that specializes in credit repair services. One of the

best known in the business, these lawyers have been practicing consumer law, and credit repair, since the early 90?s.

Beware of companies that claim to be law firms, but really don?t practice any sort of law?many companies convert to firms because they are exempt from certain requirements, such as having to place a bond with the state to ensure they comply with local laws regarding credit repair services. Always check on the reputation through sites such as the Better Business Bureau.

Signs of a Scam

There are lots of red flags that suggest a company is totally shady, and if you spot any of them, continue your search without question.

1. Charging a fee in advance is a big no no. By law, a company is not supposed to collect their fee until they have provided the services promised.

2. Credit repair companies are required to disclose your rights to you, and let you know the ways in which you can fix your credit on your own for free. Any company that does not do this is breaking the law.

3. Beware any company that claims they are endorsed by the Federal Trade Commission (FTC); this is a straight up lie as this organization does not endorse any business.

4. Under any circumstances, do not work with companies that suggest you try and create a ?new? identity. There are two tactics employed. The first is creating an EIN with the IRS (employer identification number) and applying for credit under that. The second is encouraging you to apply for a new social security number?they claim the government provides legal documents that allow you a ?one time right? to get a new one. Both of these tactics have a very clear aim of misrepresenting yourself, and it constitutes fraud. Unlike many scams where you may be a completely innocent victim, and would not be held liable, not the case here. You would be considered a perpetrator right along with the credit repair agency. And if you applied for new credit using the mail or the telephone, you would likely be looking at mail and wire fraud charges as well.

If you do decide to sign a contract, it should include the payment terms, and the total cost of the services, a listing of services to be performed in detail, how long the process will take, any guarantees that were offered, and the name and address of the company. By law, you have three days to cancel any contract for any reason, without paying any fees.

So, as you can see, working with a credit repair company can help fix your credit score, if you have legitimate claims, and you work with the right company.

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