Credit repair is often used to describe a methodic process of improving an
individual’s credit scores. If you decide to use a credit repair company, the
Better Business Bureau suggests that you beware of companies that do not tell
you your legal rights and what you can do, legally, for free. They also
recommend that you do not pay for credit repair services before any services are
provided, and they advise you not to participate in anything that seems illegal,
such as creating a new credit identity by obtaining a federal employer
identification number to use instead of a social security number.
If you have a complaint about a credit repair company, contact the Better Business Bureau,
your state attorney general’s office, and the Federal Trade Commission. If you
decide to respond to a credit repair offer, look for these tell-tale signs of a
scam: companies that want you to pay for credit repair services before they
provide any services, companies that use an email account from a free email
service provider such as @hotmail, @yahoo, @gmail, etc…, companies that you can
not locate any information online about, and repair companies that have not been
around for very long. By law, credit repair organizations must give you a copy
of the “Consumer Credit File Rights Under State and Federal Law” before you sign
a contract. If they do not provide this to you, find another company to work
with.
Many states have laws regulating credit repair companies. State law enforcement
officials may be helpful if you’ve lost money to one of these scams. You have a
right to sue a repair organization that violates the Credit Repair Organization
Act. This law prohibits deceptive practices by credit repair organizations. The
Federal Trade Commission regulates credit bureaus and credit repair
organizations.
Take some time and educate yourself about your credit reports and help yourself
eliminate the problems that can keep your scores low. Many credit repair
companies are a scam, but there are several legitimate, by the book, credit
repair companies out there as well. Use due diligence when deciding whether to
use a credit repair company or not. Ask for referrals, do a little background
work on the company, and make sure that they do, or do not do, some of the items
mentioned above.