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Trying to Find a Legitimate Credit Repair Service
- By Lexington Law
- Published 11/20/2009
- Personal Finance
- Unrated
Lexington Law
Providing credit repair services since 1991, Lexington Law has helped over 500,000 clients legally take on their credit. Last year alone, Lexington Law helped clients remove over 600,000 negative items from their credit reports.
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The Federal Trade Commission (FTC) enforces consumer protection law and is responsible for protecting you and me from companies that attempt to get our business through false claims, illegal services, and improper disclosure. With regards to , practices like these became so pervasive that Congress passed a federal law to outline how credit repair organizations can operate. The Credit Repair Organization Act (CROA) was passed to protect consumers and provide them with recourse if they are a victim of a dishonest credit repair organization.
When researching credit repair organizations, there are some key indicators alerting you to stay clear. According to the Federal Trade Commission, avoid services that:
Require Payment Before Services are Performed - Credit repair companies shouldn't request payment prior to services being rendered. Under the Credit Repair Organizations Act, these credit repair companies cannot require payment until they have completed the services promised. This is to protect people from companies that charge large upfront payments and then do not perform the agreed upon work.
Do Not Disclose Your Rights - Trustworthy
credit repair companies will let you know that you have a right to order one free copy of your credit reports every 12 months from each of the credit bureaus, and that you can dispute inaccurate or questionable items on your own. If a company does not alert you to this information, specifically in the form of a CROA required disclosure titled "Consumer Credit File Rights Under State and Federal Law", take your business elsewhere.
Advocate Creating a New Credit Identity - Some sketchy credit repair clinics will actually advise you to create a new credit identity by using an Employer Identification Number (EIN) in place of your Social Security number. This is a serious crime and if any credit repair company suggests this as an option, run the other way.
Lie About Services They Provide - Be wary of credit repair providers that guarantee to remove negative and accurate items, such as liens and foreclosures, from your credit reports. No one can guarantee that items will be removed, especially if the items are true.
When researching credit repair organizations, there are some key indicators alerting you to stay clear. According to the Federal Trade Commission, avoid services that:
Require Payment Before Services are Performed - Credit repair companies shouldn't request payment prior to services being rendered. Under the Credit Repair Organizations Act, these credit repair companies cannot require payment until they have completed the services promised. This is to protect people from companies that charge large upfront payments and then do not perform the agreed upon work.
Do Not Disclose Your Rights - Trustworthy
Advocate Creating a New Credit Identity - Some sketchy credit repair clinics will actually advise you to create a new credit identity by using an Employer Identification Number (EIN) in place of your Social Security number. This is a serious crime and if any credit repair company suggests this as an option, run the other way.
Lie About Services They Provide - Be wary of credit repair providers that guarantee to remove negative and accurate items, such as liens and foreclosures, from your credit reports. No one can guarantee that items will be removed, especially if the items are true.