First, realize that in most cases, you can do everything they can do. So you need to be aware of what can and cannot be done.
No credit repair company can remove legitimate negative information from your credit file. Those who promise to do so are breaking the law. If a company tells you they have a “proven method” to remove all negatives from your file, run the other way. At best they’ll take your money and at worst they’ll get you into legal hot water.
What they can do is get errors corrected and see that items that should be removed are removed.
For instance, all negative financial information has a time limit, but not all companies honor that limit.
A consumer reporting company can report unpaid accounts for 7 years and bankruptcy information for ten years. If you have these items still showing in your credit file after their time limits have passed, the credit repair company can help you get them removed.
A credit repair company can also help you file Dispute Letters to remove information that is in error. This could be a simple data entry mistake that put someone else’s information in your credit file, or failure to remove unpaid debt that was charged off in a bankruptcy proceeding.
You can do all this yourself, but if you feel unsure and want help, do use caution in choosing a credit repair company.
The Credit Repair Organizations Act requires companies to give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract with them. And they must give you a contract.
They are not allowed to charge you any fees until they have completed the services promised in the contract, and they are not allowed to perform any services until three days after you have signed the contract. This gives you a “cooling-off” period in which to change your mind if you’ve acted impulsively in contacting them.
Your contract must set forth a detailed description of what the company will do for you, along with the total cost and the payment terms. They must also tell you how long the services will take and set forth any guarantees in writing.
Caution: Do not sign any agreements with a company that fails to give you their company name, business address, and phone number. The Internet is crawling with scam artists, so beware.
If you have been victimized…
If you’ve already fallen prey to a bogus credit repair company, do report it. Contact your local consumer affairs office or your State Attorney General. They may be able to help you, and they may be able to protect other consumers from the same kind of fraud.
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