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Facts About Credit Repair Companies |
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Applying for a credit card, mortgage, student or auto loans are fairly commonplace events. What is important is how efficiently one is able to payoff the monthly installments. Delayed payments or inability to satisfy the payment criteria result in a negative score in the credit report which poses a threat to future financial assistance. A good credit record plays a huge role in how easy it is to secure financial backing from banks or private lenders. The anxiety to maintain a good credit history has led to the mushrooming of a large number of credit repair companies promising to deal with all aspects of credit fixing. What do the credit repair companies claim to achieve? To start with they undertake to act on your behalf beginning with applying for a credit report. If there is reason to suspect a mistaken claim damaging your credit record, you can approach the credit repair companies with the necessary documents to support your dispute. The credit repair companies then prepare letters of denial against each of the listed negative item and dispatch it to the credit bureau. They also follow up the matter on your behalf saving you time and effort. All this is done in exchange for a fee that can range from $15 to hundreds of dollars. Contrary to their claims, credit repair companies can never erase bad credit if the information is accurate. If the credit bureau is unable to verify the negative items within a period of 30 days they need to be deleted from the report till a time when the validity of the information is established. So what you need to pay them to do can be done yourself with a bit of commitment and meticulous planning. Before the decision to engage credit repair companies it is good to be aware of certain laws binding them. The Fair Credit Reporting Act states that the credit repair clinics have to advise you of your rights before signing an agreement. Further they need to indicate the fee break-up for the services performed. Prior to approaching a company make sure that it has a record of reliability. The company's certificate of registration, pending litigations, complains and the solved problems need to be examined. Be absolutely clear about what the company claims it can do and what is beyond its capacity. Any mention of removal or alteration of accurate information is a sure sign that the company is untrustworthy. In order to avoid becoming victim of a scam beware of the following negative indications. a) A demand for payment prior to the service. b) No mention of the client's legal rights. c) Dissuading you against contacting the credit bureau yourself. d) A persistent advice to dispute all the entries in your credit report e) Recommending illegal steps such as creating a brand new credit identity to tide over the present crisis. Far from relieving you of financial stress, such credit repair companies will create a situation where you are liable to prosecution by law. In recent times, several non-profit organizations such as the consumer credit counseling services and programs have emerged as a welcome alternative to credit repair companies. They are known to offer the same options as the credit repair clinics but for free or in exchange for a nominal fee. |
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