Jul 1, 2009

Recognizing Credit Repair Scams

As the economic slump continues, more and more people are looking to credit repair in order to improve their credit scores. Creditors are requiring higher scores in order to qualify for loans that in the past could be obtained with mediocre or even marginal credit. Individuals who have lost their jobs and missed payments on credit accounts depend on credit repair in some cases to improve their scores to levels that will allow them to qualify for these increasingly strict credit requirements that lenders have imposed. Scam artists recognize the increased market, so any consumer looking for credit repair help should be prepared to go the extra mile before signing on with any credit repair company. In particular, be wary of any company that falls into one or more of the following categories – chances are good that you may be looking at a scam:

Guaranteed Score – any credit repair company that guarantees you a particular credit score is almost always a scam. There is no way to know for certain how high your credit score will be, even if the credit repair is successful. Creditors advertising a 700 or better in 30 days are just out to take advantage of desperate consumers.
Minimal Contact Information – be wary of a credit repair company that operates solely from a website. If there is no phone number, and no physical address, it is very difficult to be certain of a company’s legitimacy.
Just Opened – don’t trust your credit repair needs to a company that just opened. Scam artists often start fake companies only to fold months later, after taking hundreds of thousands of dollars from unwary consumers.
High Pressure Sales – reputable credit repair agencies don’t need to resort to high pressure sales tactics to convince you to hire them. If the company’s experience, history, and level of service aren’t enough to impress you with their ability to help, don’t let a flashy sales presentation convince you otherwise.

Credit repair companies provide a valuable service to consumers looking to get a fresh financial start, but it’s important to be certain you’re working with a professional. Check references, the Better Business Bureau, and even online complaint boards before you make a decision, and be prepared to shop around in order to avoid being taken in by scam artists. By doing the research before you commit, you’ll have a better chance of avoiding scam artists and actually getting the credit repair services you need.

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Sep 29, 2008

Do-It-Yourself Credit Repair: Why it’s Not as Simple as it Seems

Looking at credit repair websites online, it’s easy to get the impression that credit repair is simple, painless, and quick. Just hand over your credit report (or in some instances, the company even pulls your credit report for you) choose which items to dispute, and sit back while the credit repair company mails a letter or two and gets the negative information off of your credit report for good. Credit repair sites can make the process look so simple that some people may wonder why they need a credit repair company at all. It’s just mailing a form letter, right?

Though you may be tempted to try to repair your credit on your own, there are some definite pitfalls to this route. Aside from the fact that most people lack the expertise to really repair their own credit effectively, there are some common pitfalls that the ‘do-it-yourself’ types often fall into when it comes to credit repair. If you decide you want to try it on your own, keep these caveats in mind:

1. Don’t Dispute Everything at Once.

Consumer reporting companies are required to respond to and investigate any dispute that is not deemed “frivolous”. There are no hard and fast rules for what constitutes a frivolous dispute, but having all of your negative credit entries in dispute at once will almost certainly cause some companies to ignore your request. This means that negative items may be even more difficult to remove – as multiple disputes over the same item can also be considered frivolous.

2. Provide Proof When You Have It.

If you have receipts that show you paid on the first of the month, but the creditors are showing the payment on the 19th, you should use this to your advantage. Make copies of the receipts and enclose them with your dispute. Is your name correct on those derogatory items? How about your address? Any legitimate reason to dispute a negative item should come along with some proof as to why the dispute is being made.

3. Keep Your Tone Professional.

Consumer reporting companies respond best to communications that are courteous, professional, and direct. Don’t’ write long-winded letters of dispute, and don’t try to obscure the facts. Make your request, present your evidence, and summarize your position on the issue. Poorly worded disputes may also be seen as frivolous, so pay careful attention to both spelling and grammar. Additionally, you may wish to use a template – but be aware that if all of your disputes read like form letters, you may not see much progress. Still, for those who want to handle the dispute from start to finish, there are form letters available online that serve as a good base to start with.

Credit repair isn’t as simple as it seems to be in the surface. The expert credit repair representatives that do a good job and operate above board provide a valuable service to those individuals who either cannot, or will not attempt to handle credit disputes themselves. This is why it is especially important to find a reputable agency to repair your credit – expertise always gets results. However, if you are one of the do-it-yourself types, following the above guidelines will help ensure that your credit repair attempts aren’t derailed from the start.

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Dec 19, 2007

Choosing a Credit Repair Company

Finding the right credit repair company can be a big decision for anyone with bad credit. Choosing the right one could end up being one of the best things you can do for your financial future. Repairing your credit scores can help you qualify for lower interest rates and increase your financial options.

A typical credit repair service usually charges a few hundred dollars and takes about 6 months to repair your credit. It usually depends on how bad your credit is. Some clients can be finished within a month or two and will pay considerably less. Others can take over a year and cost more than a thousand dollars. Most credit repair companies have a one-time set up fee and then low monthly payments. It is in violation of the Credit Repair Organizations Act to charge the full amount before they provide any services.

Unfortunately, the credit repair industry has received a bad reputation because of the publicity given to credit repair scams. While fraudulent credit repair firms tend to be shut down quickly, it is still in your best interest to learn how to identify the differences between a legitimate credit repair service and a credit repair scam.

Some warning signs to look out for:

The company wants you to pay for credit repair services before they provide any services.
They don’t tell you your legal rights and what you can do for yourself for free.
They suggest that you try to invent a “new” credit identity and a new credit report by applying for an Employer Identification Number to use instead of your Social Security number. This is highly illegal. If you follow illegal advice and commit fraud, you may be subject to prosecution.

You should also research a credit repair company at the BBB (Better Business Bureau). The BBB keeps notes on complaints made against companies. If the BBB report for a credit repair company lists multiple unresolved complaints or an overall low rating, you should be wary of the company.

Check out the Top Credit Repair Companies online.

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