As you get older, you find you want more out of life. You’ll want a house, a car, a career. But financial mistakes you made from your past may make it seem impossible to get these things.
A good solution to these problems is to get your credit repaired. Most people choose to use a credit repair company for this task. You’ll have to do a bit of research to find out which credit repair company is right for you. Fortunately I’ve put together a list of qualities that should help you find a good, solid company – and avoid getting scammed.
Years in Business
The number of years a company has been in business shows you how much experience they have in their field. As a general rule, the best credit repair companies have been in business for more than five years. Since credit repair involves working closely with state and federal regulations, a team of lawyers should be employed by the company specifically for helping people repair their credit. These lawyers should have experience in the industry too. While it is unlikely that you will be able to do a check on every lawyer the company has available, they should be able to tell you how many years of experienced (combined or individually) they have in credit repair.
Honesty
There are certain laws in place to protect you, the consumer, from being taken advantage of by credit repair companies. A good company will have these laws listed on their website. They will inform you of your rights as a consumer according to the law.
They will also be direct about their services. Federal law states that credit card repair companies must tell you exactly what services they are providing for you. Here are some questions you can ask to make sure they are honest:
- Are they communicating on your behalf or for you?
- Are they contacting your creditors?
- How will they contact them?
- Will they sue them on your behalf if they find legal grounds to do so?
- Are there certain things they won’t do?
The answers to these questions need to be stated clearly, leaving no room for guesswork. If you decide to do business with them, these services should be clearly outlined in the contract they provide.
Contracts are an important part of this business. They protect both the business and the consumer in case something goes wrong. Read over your contract carefully. If there is something you have a question about, just ask. They should give you a simple, straightforward answer that you can understand, not one filled with technical legal jargon.
Testimonials
You likely look online for testimonials before you try a product or hire a company to do a service for you. You should do the same for credit repair companies.
Reviews and testimonials tell you if the credit repair company can perform to your expectations. The longer the list of testimonials and reviews, the more you can trust that company to repair your credit. Don’t discount companies that only have a handful of reviews, but be cautious. Credit repair companies should be honest and as transparent as possible about their testimonials. If they do not present them realistically, or they sound generic, it’s best to move on to another company.
Warning Signs of Scams
The Consumer Financial Protection Bureau lists these six signs as warnings of credit repair scams:
- You have to pay before services are provided. Federal law says that credit repair companies cannot ask for payment until they provide the services they promised.
- The company doesn’t clearly disclose your legal rights or tell you that you can repair your credit yourself for free.
- The company tells you not to contact the three national credit reporting companies.
- They tell you that they can remove any negative information from your credit report, even if it’s current and accurate. This is impossible to do.
- They tell you to dispute everything on your credit report, even if it’s accurate.
- They suggest you get an Employee Identification Number to replace your Social Security Number, so that you can have new credit history. This is a federal crime.
Here are some other signs that the credit repair company you’re working for is a scam:
- They contact you shortly after you file for bankruptcy.
- They don’t offer you a contract.
- They only take cash.
- They don’t offer you a three-day period for a no-obligation cancellation. Federal law states you have three days to decide if you want to use a credit repair company’s services. If you cancel within those three days, you cannot be penalized or charged.
- Their testimonials are unverified or fake.
- They don’t tell you how much your total cost will be.
- They misrepresent or lie about their services. (They tell you they will do one thing but then wind up doing something else.)
Credit repair companies are designed to help you make a necessary part of your life better, so that you can get the most out of your life. But you must be careful when you choose a company. Only pick a company that is honest, up front, has years of service in business, and has testimonials and reviews to back up their claims.
