The Truth About Credit Repair Companies

Are Credit Repair Companies Helpful?

You may have seen ads that promise to get a new credit file. Or you may have seen warnings from the consumer protection agency about credit repair scams. The truth can be obscured between the two. There are many complaints to the Federal Trade Commission and other consumer protection agencies about credit repair companies, and in fact, numerous cases have been filed and websites reported for violating state and federal laws.

It is not difficult to understand why people can fall victim to repair company scams, as they may have ruined credit and desperate to borrow again or need to start building wealth after some financial mistakes. It may be worth borrowing at low rates to get good debt, but bogus schemes should be avoided.

A new credit score: It can be extremely difficult to start a credit history, even with a new social security number or employer identification. There are variations of these scams that can involve stolen identities of deceased individuals and fake EINs.

Credit is guaranteed to everyone - If you're having trouble getting credit, you may be drawn to offers that promise a major credit card or line of credit. In many of these cases, you may have to pay an illegal fee that can be as high as $ 1500.

Unsecured lines of credit can also be offered, but the unknown condition is that you are only allowed to use it to purchase from private stores, and you may also have to make large down payments for the merchandise ordered. Another variation includes fees that exceed the amount of credit allowed.

Should You Use Credit Repair Companies?

While there are scams among repair companies, there are times when credit repair agencies can be helpful. If you have little success in your attempts to repair your credit, you may need help with specific problems. There are law firms that specialize in credit repair, but they must be chosen carefully.

Credit repair companies are regulated at the federal and state level; The obligations include informing you of your rights as a consumer, before signing any contract.

Under consumer credit laws, it is illegal for best credit repair to make false claims about their services or perform any services until you have signed a contract and a three-day waiting period, during which you can cancel the contract without pay fees. has been completed. They are also not allowed to charge until all promised services have been completed.

Pay credit repair companies:

Many credit bureaus circumvent the initial fee clause by stating the fee as an educational service before the repair is made, and some may refund fees, if the items cannot be removed from your credit file. any credit repair services. companies, it is very important to do your due diligence and decide what can be done on your own.