Credit Repair Services 101: Red Flags to Watch Out For, Your Rights, and Choosing a Legitimate Company
Under the “Credit Repair Organization Act,” it is illegal for credit repair providers to lie about what they will be able to do for you and try to make you pay before they have performed any service. These are red flags to look out for when comparing offers for credit repair services. There is a do-it-yourself approach, but it can be time consuming and complicated depending on how messed up your credit reports are.
The ideal company will request copies of your TransUnion, Experian, and Equifax reports and review all derogatory marks such as charge-offs, bankruptcies, late payments, tax liens, etc. Also, did you ever check to see if you were one of the millions of Americans affected by the Equifax hack? Hurry up and do it if you haven’t already. If some of your personal information is vulnerable to identity thieves, you’ll want a credit repair company with lawyers to help you prove that he’s a victim.
The CROA requires any company you work with to explain your rights to you in a written contract, along with details about the services it will provide. No company can make specific promises. If you are not provided proof that they are doing everything they can to help you, then you have the right to sue them in federal court.
Avoid scams with credit repair services
Avoid scams by paying attention to red flags and only working with an organization that has a long-standing, positive reputation. What are some of the strategies that a legitimate business will do to help you repair your credit? You will prepare a plan to dispute errors and try to eliminate as many negative elements as possible through the use of legal methods. The reason why it is ideal to work with such a company instead of using the do-it-yourself approach is that they know how to negotiate with creditors and will do so on your behalf. Tired of being harassed by nasty debt collectors? Just opt for credit repair services that include sending cease and desist letters to collectors.
It may not be a good idea for you to apply for new accounts to try to add positive information to your report to balance out the bad, so beware of any company that tries to convince you to do this. If you’ve had trouble managing your debt in the past, it may not be the right time for you to apply for new lines of credit/loans. Depending on how low your credit score is, you may not even be able to get approved for new credit accounts anyway, and applying for them will negatively impact your credit scores anyway due to “soft hits.”
Now that you know how credit repair services can help you, as long as they are honest and legitimate, you can start cleaning up your reports. Just get a free consultation from Lexington Law.