When you’re in great financial distress, creditor’s lawyers sending legal attorney-written letters & credit bureaus refusing to accept hand-written credit dispute letters, credit repair companies sound like the best choice to rebuild your credit. For a fraction of cost of repairs, onshore & offshore agencies promise a good return on investment; deleting bad information, inserting positive comments, removed unverified claims etc. Sadly, the dark side is that credit repair firms do have bad services.
What is a credit repair and legitimacy?
Desperate for better credit – many consumers got attracted to services offering instant recovery of unpaid debts & under 30 days boosting of credit scores. Do these companies do what they promised? Perhaps, you might be vulnerable to credit repair scams. Never get involved in any of the scandals taken for a quick fix.
Exposing to shady services often creates unnecessary troubles. A credit repair agency could originate from either a local business selloff or a franchise license. The disadvantages of hiring external vendors is that businesses can subject to closure or went missing after credit repair scams successfully.
How do I determine a credit repair legitimacy? The industry is governed by the Credit Repair Organizations Act. Businesses, agencies, licensed franchisees or other relevant stakeholders performing professional credit repair paid services have to observe the criteria. If a firm failed to match the requirements of CROA, likely you’re dealing with a credit repair fraud.
Note: Do not be blind to several signs of credit repair frauds because of instant credit fixes.
How do I recognize a credit repair scam?
Signs of potential frauds in credit repair – important of financial debt education on sieving out bits & pieces of conmen practices. You might be getting scammed for failing to recognize a fraudulent credit repair service. No matter how you’re struggling with bad credit, do not “blindly” buy into hard-selling marketing schemes.
Learn some of the more sophisticated credit repair scams in 2018:
- Transparency before contract signing: a legal credit repair company furnishes relevant documents to you – Consumer Credit File Rights Under State & Federal Law – granting you on rights to retrieve a copy of credit report and dispute inaccurate information in a retrieved credit report.
- Signing of contractual agreements: a licensed credit repair agency has to draft out official credit repair contracts for you to review, inserting of better terms and removing of certain clauses – a personalized set of legal documents in repairing credit.
- Immediate payment: according to credit repair organizations act, no company must request for an upfront payment to a cr firm, doing so leads to criminal offense & trial.
Read on (below) for more details of highly sophisticated credit repair scams. The purpose of a repair clinic is to help debtors in retrieving copies of credit report, educate on the do’s & don’ts of credit repair, rendering counseling services to troubled folks and finally considering a proposal to seek assistance from associated creditors & credit bureaus.
Credit bureau offices do notice which agencies are legal and those performing unethical practices. When in doubts, it’s possible to call a credit bureau hotline and asked an agent on the recommended credit repair companies. The answer may be ambiguous as officers cannot speak on behalf of credit repair agencies but you get a good deal of knowing who not to do business with.
Note: Remain as informed as possible by calling up Experian hotlines & Equifax agents.
Why are shady credit repair services doing fraud?
Fast money received from vulnerable consumers – one of the easiest ways to legally scam distressed debtors due to immerse pressure & inability to think appropriately. Credit repair services do not need to be governed by financial intermediaries. The fact of companies performing unethical debt management practices is real.
Britzsky  reported on a survey finding of many reputable credit repair companies offering services that are “greyish” to a certain degree. It is not possible to be completely clean else bad credit takes up to seven years to be removed (while bankruptcies remained for about 10 years). Legal threatening of creditors to removed bad information or negotiate for debt settlement & interests to be repaid are considered to be “unnatural” recovery of credit.
So, it depends on the extent of how far credit repair services go to in attempting frauds. Some agencies don’t have limits in bursting through the ways of getting bad debtor’s records clean up. Others knew when to stop pursuing for damaged clearing. It is up to the debtor’s confidence in placing trust on such “shady” credit repair services.
Note: You’ll be surprised that some debtors don’t care about ethics or cleanups so long as bad credit is removed in the fastest & accurate manner.
Why look for the best legal credit repair companies?
What you need to know about credit repair firms – learn from one of the most established corporations on credit education in the U.S. today. Some shady credit repair clinics claimed on the rights of file segregation and able to perform such services. The truth: none of shady credit repair companies will do so.
During an endeavor to retrieve a list of the best legal credit repair specialist clinics, go shopping at 2 common places; visiting physical credit repair offices at different locations near you & online credit repair comparison websites for reviews and convenience. Most bad repair clinics don’t possess a long lifespan. Over time, the firm closes down due to lack of experience or receives legal letters from creditors & debtors.
One good problem of having licensed credit repair franchises and companies is on the effect of doing debt repairs. If you recalled past experiences using shady cr firms, your credit score dropped by 5-10 points is painful. Further credit repair progress resulted to 330 credit score. It is one of the worst encounters for someone to obtain a negative credit history, permanently.
Note: Even aggressive credit repair companies can hurt your credit score badly.
What can I learn from CFPB actions on credit repair scam?
What you can learn from CFPB’s legal actions against “black-hat” credit repair companies – firms employing non-approved or unlicensed credit repairs are dealt with by the Consumer Financial Protection Bureau (CFPB). Avoid companies that are accused of violations in recent years.
Let’s review 3 California-based credit repair companies receiving legal actions from CFPB:
- Prime Credit, LLC. & Prime Credit Consultants
- IMC Capital, LLC.
- Commercial Credit Consultants (helped Accurise before)
What these companies found guilty? CFPB received consumer’s complaint against the aforementioned firms charging upfront fee payments, limitations of money-back guarantees for a certain duration and overpromise customers on eliminating bad credit information easily. Huge penalties imposed on their of civil lawsuit claiming $1.5M to be paid and relinquished funds to U.S. Treasury of $500 grand. This is in top of a 5-year ban plus permanent exclusion of credit repair services.
Do not worry about dealing with credit repair scams. CFPB has been taking legal actions against unscrupulous sellers of repairing bad credit but not really swiftly across the U.S. The pool of credit repair scammers in the industry is huge, requiring some time to replace bad ones and accept newer, better credit repair firms.
Note: Observe the above tips & tricks in avoid a credit repair scam.
How bad credit repair clinics scam me?
7 different ways for credit repair clinics to con your money – a common way of describing how repair clinics deal with customers. When an agency calls you for a credit repair service, observe the 7 signs of a credit repair scam. Some firms can be trusted but not many could deliver what is promised to you – a full-fledged credit repair service.
Here’s 2018 latest warning signals when dealing with bad credit repair clinics:
- Non-disclosure of information on do-it-yourself credit repair
- Not providing contract to fix bad credit
- Lack of detailed information demonstrating competence in repairs
- Required upfront payment of fees before service delivery
- Promises on removing accurate information & verified claims easily
- Create new EIN number or buy another profile of different legal entity
- Signing of any waiver forms on CROA’s laws or regulations
Do not apply for any credit repair services doing shady businesses. It might help temporarily near future but your credit scores are hurt in the long term. What “bad” credit repair companies do is to promise you short-term strategies in obtaining approvals for bank’s interest rates, better terms for mortgage loans, more credit more benefits from higher tiers or complete cleanup of credit report under 60 days.
Many signs & warnings of credit repair scams appear at the façade of business agreements. It is possible to spot even 1 of the most common appearances, so long as your mind is clear in management of bad credit. Stay professional & polite in dealing with suspected fraudulent credit repair companies. Report them to your credit repair attorneys or the CFPB immediately.
Note: Reporting illegal or shady credit repair clinics takes time for CFPB’s investigations.
Good to know about scam: how to identify fraud in credit repair
Help: I have been scammed by credit repair firm – don’t let the agent get away with a credit repair scam! Immediately take action using your consumer rights & consumer protection. It is recommended to visit the National Association of Attorneys General’s site to find a legally appointed attorney general in your State. Issue a complaint directed to Federal Trade Commission (FTC) & Better Business Bureau (BBB) and Consumer Financial Protection Bureau (CFPB).
An attorney dealing with credit repair frauds will attend to your needs. It is possible for the attorney to do in writing filing lawsuit against the shady credit repair company & protect you against legal repercussions. No effect shall be on your end but time wasted in repairing nothing.
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Quote of the Day: “Always insure against fraudulent companies – KIG Hall [2013-2018]”
» Highly effective cr solutions: How to win a dispute?
» Aggressive credit repair: Challenge your creditors!
» Hire reputable credit repair companies: Who do you trust?
» What you need to know about a credit repair: Knowledge is freedom!
» Do’s & don’ts of a credit repair: Pros & cons of a credit repair!
This article was originally published on March 28, 2014. It has since been updated.