Bad Credit Repair Clinics: The Mysterious Repair Shop |
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Credit records have, of late, been squeezed into a three-digit number called a credit score, which has become the sole criterion in deciding whether you qualify for a loan and the amount of the monthly payment and the interest rate at which you get the loan. A high credit score ensures easy availability of the loan, convenient monthly payments and softer interest rates, whereas a low credit score will deprive you of all the above benefits. It is thus natural for people with bad credit to aspire to improve their credit rating and for that bad credit repair is the most convenient answer. However, as the demand for bad credit repair increases, more people are turning to companies that provide bad credit repair services, thereby
increasing the opportunities for scams. If your credit report is inaccurate and your credit score is low, you can either tackle it yourself or take the help of a bad credit repair service company. The Fair Credit Reporting Act empowers consumers to dispute errors in their credit files for free but doing this takes time as you have to apply for your credit reports, review and highlight errors, document the mistakes, type your letter and mail it. As such, it is better to get the help of a bad credit repair service company that, for a fee, does this daunting work. They add professionalism to the work of pulling credit reports, reviewing for errors and sending out dispute letters along with proper documentation. Some bad credit repair service companies guarantee 100% elimination of bad credit and others advertise that they can erase bankruptcies from your credit file forever. There are, however, no magical secret remedies to erase bad credit and neither you nor the bad credit repair services have the right to remove accurate and current information from your credit report. You should also know that you can do for yourself anything that the credit repair services claim that they can do. Moreover, you should not be taken in by some fraudulent claims that there are loopholes in the federal law that allow poor credit to be removed. There aren't any such loopholes. According to the Federal Trade Commission (FTC), the law states that bankruptcy remains on your credit report for 10 years and as such it cannot be legally removed. Similarly how can bad credit repair services remove bad credit? FTC says that there is no legitimate bad credit repair clinic. If the promises of bad credit repair service companies fall within the Fair Credit Reporting Act (FCRA), then they are legal but if they promise to do certain jobs that are not within the ambit of FCRA, they are certainly not overboard. These promises can include removal of accurate but negative information, and scams occur when consumers are lured to pay fees for services that are never performed, or the consumer is misled on the services provided. Such scams form the bulk of consumer complaints reported to the FTC and the actual amount of losses to consumers could be in the range of millions of dollars. How to look for a reputable company? If you still decide to take the help of bad credit repair services, you should make your search as thorough as possible. You must do your homework properly. The first step is to contact the Better Business Bureau and check if the firm has had any consumer complaints and you should also check with your state attorney general's office or other state consumer agencies to find out if there are any pending legal investigations. You should not rely on chambers of commerce or other trade associations where membership is only through a fee. The Credit Repair Organizations Act entitles the consumer to certain rights such as: the bad credit repair services must provide explanation of the consumer's rights before signing a written contract which should include payment terms for services, total cost, detailed description of services to be performed, time required to achieve results, guarantees offered and the company's name and business address. |
