When you contemplate signing up with a credit repair agency in an effort to reset your financial priorities and boost your credit score, you need to know what you are getting yourself into for the long haul. Not all agencies claiming to help your score are operating on the up-and-up. Many are just in it for the money and counting on your ignorance of the law and desperation for a better score to make a fast buck.
Here are some tips to help you avoid getting taken in by countless repair scams and what you should know about their service contracts.
- Beware promises that are not realistic such as claims of ‘overnight credit repair’ or ability to remove all negative information from your report. Both concepts are impossible and in some cases illegal.
- Realize you can do everything yourself for free. Consumers have the power to repair their own mistakes. They only part of the equation they have to pay out of pocket for is the credit score information which costs about $15 from each reporting agency. Otherwise, all other work is free including filing disputes of inaccurate negative information contained in a credit report. Read more…
Negative records on your credit report can cause a substantial drop in your credit score. While the tips and strategies we teach at CreditRepair.org may be helpful for many, they will not be as effective in case you have negative records, which keep bringing your score down.
Deleting Negative Records
There are professional credit repair agencies, which specialize in removing negative items from clients’ credit reports. We highly recommend Lexington Law because of their astonishing track record (see the short sample on the left), client testimonials, company ratings and true expertise in this space.
If you want to learn about a company’s services, the best people to ask are its current and former clients! Watch the video below to see what people have to say about their experience with Lexington Law and the result of the service on their credit scores and reports.
The path to credit repair might require you to pay off some (or all) of your past due accounts. You could easily feel overwhelmed by the amount of your past due accounts, but don’t let this discourage you or cause you to delay your credit repair. You can pay off these accounts one at a time.
Figure Out What You Owe
Make a list of all the negative accounts on your credit report that have outstanding balances. Your credit repair agency may not be able to get these removed these from your credit report unless you can pay off the balance. If you put together a list of the accounts you owe, you can better come up with a plan to pay off all the accounts.
Your accounts may have different levels of delinquencies. Some may be late, but not yet charged-off. Others may be charged-off. And you may have some accounts that are with collection agencies. How you pay your accounts depends on how delinquent they are. For example, if you have accounts that are late, but not charged-off, you might pay them to keep them from becoming charged-off, especially if you don’t have any other charge-offs on your report.
Pay for Delete
When you work with a credit repair agency, it’s important that you have a contract that spells out what the company will do on your behalf. Read through the contract and ask questions about anything you don’t understand. Here are some things you should expect to be included in a credit repair contract.
Your credit repair contract should include how much you’re expected to pay for credit repair and when your payment is due. Make sure the amount that’s included in the contract matches any oral agreements made. For example, if you were promised a discount on your services, this discount should be reflected in your contract. What you sign up for is what you’re responsible for paying. Handle any discrepancies before you sign.
Services to Be Completed
In your contract, the credit repair company should include a detailed list of all the services they’ll perform on your behalf. This may include preparing and sending letters to the credit bureau, disputing items on your credit report, etc. Just as with the price, make sure all services you discuss are listed in your contract. Credit repair companies are not supposed to misrepresent their services or make promises to do things they can’t legally do.
By law, your credit repair contract must include the Read more…
One of the essential components of credit repair is your ability to remain consistent in your efforts to keep your credit report accurate and your credit score as high as possible. Lenders today are looking for scores of 730 and above when making lending decisions at the best rates. It is in every consumer’s best interest to work on keeping their credit reports accurate and up to date.
Why Consistency Matters
There is a heavy emphasis for consumers to monitor their credit history reports and every consumer has a right to check in with their reports annually at no charge. There is also opportunity to request free credit reports when you are denied credit. Your credit score does not come free with your reports but it is your history that is what really needs special attention.
Most consumers will look at their credit history at least once a year or when they need financing but that may not be enough to generate the highest credit score possible. In the interest of time management, it may be wise for consumers to Read more…
With an increased focus for consumers on repairing their credit, it makes sense that there are increased efforts on behalf of less-than-reputable ‘credit repair’ companies to market their services to unsuspecting consumers.
The Sad Reality
So many people have suffered through debt and other financial problems that led to a poor credit rating, the national economy felt the punch, especially in light of the housing market crisis. Since the attention on the importance of good credit scores has been steady, more consumers finally feel ready to take their debt to task and finally do something about repairing their credit. There is no longer the deep stigma associated with debt there was in year’s past.
While it is a good sign more consumers are paying attention to their personal finances, it is also creating a vulnerable position for many who are not sure where to start or if they are up to handling the task at hand. They still fear debt negotiations with their creditors or are in need of a ‘quick fix’ to pursue more financing. Both scenarios have paved the way for a so-called credit repair company to easily come to the rescue.
The sad reality is that while many consumers have the best intentions, not all agencies feel likewise. Many are in it for the cash and do not think much about the damage they are causing to consumers when the money is gone but no legitimate credit repair work is done on their behalf. Scam agencies are increasing all the time, promoting credit repair services that are essentially impossible. They make it sound so easy in their aggressive advertising campaigns and many consumers take the bait. Read more…
When you hear or read about credit repair companies from “reputable” sources, you usually see these sources warning you against credit repair. They tell you not to hire credit repair companies and that you’re better off repairing credit on your own. Why have credit repair companies been made into villains? Because many of them are villains.
In 2008, the Federal Trade Commission (FTC) shutdown 33 credit repair companies because these companies violated Federal laws for credit repair companies. When the FTC sues these companies it’s usually because they’ve been making false claims, not delivering on their promises, and taking money from customers upfront. These are all illegal for credit repair companies to do.
It’s Easy to Start a Credit Repair Company
Anyone can start a credit repair company. While there are Federal laws stating what credit repair companies can do once they’re operating, there are no laws or requirements for any individual or company to start doing credit repair. The internet makes it easy for someone to start a credit repair company without even getting a state business license or training. Read more…
You’ve put forth a lot of work in repairing your credit. You have filed your disputes with the credit reporting bureaus. You figure you have it all taken care of until weeks pass by and you have received no reply from the credit bureaus.
Credit bureaus have the legal obligation to reply to your correspondence within a 30 day time frame. The Fair Credit Reporting Act states that the bureaus must have their investigation completed on your behalf within four weeks. In some cases things do not go as planned. So what do you do now? Read more…
As lenders continue to implement more aggressive qualifications for loan approval, consumers must be diligent in maintaining or improving their credit history and credit score. What may have been considered a good score a few years ago simply will not do the trick in today’s economy if you are shopping for a loan. In some cases your credit may be good enough to qualify for a loan but at higher interest rates than those offered to individuals with even better credit. Lenders are not the only people considering your credit history; insurance companies and employers also consider how you have managed your finances in the past when reviewing applications. If you have bad credit, your first priority to better improve your personal finances is credit repair. There are plenty of ways to achieve this goal with one of your options being a credit repair company. Read more…