Common Mistakes When Doing Credit Repair

Credit repair is the process of keeping one`s financial life healthy. In the process you may end up making several common mistakes.

Hiring a credit company that over promise. Credit repair companies know how to repair credit but they do not know or have the capacity to control the specifics. They neither control items on your credit report nor do they control companies that put items on your credit reports. A company cannot therefore promise you that certain item will be deleted or what your score will be when they are through with the service. The Credit Repair Organizations Act prohibits any credit repair company to make false promises or guarantees that would lure a customer into purchasing a service over another. A company should therefore not offer specific time deletion promises or specific promises in a bid to attract more consumers.

Making payments prior to services being rendered. The Credit Repair Organizations Act requires that any credit repair company must deliver the before charging the customer. Upfront Fee Payment where a consumer is required to pay full payment in advance is thus illegal. Consumers are therefore advised to go for companies that offer Monthly Payment Model or Payment After Deletion Model. Payment After Deletion Model involves payment after the actual result have been realized. Therefore, consumer will only pay when there is actual deletion from their credit reports. Monthly Payment Model is where consumer pays for the completed services of the previous month.

Misrepresentation. Most companies misrepresent themselves in order to increase their sales. Salespersons are paid on commission based on their sales. They thus employ all tactics to ensure they make good sales. Some will give fake deadlines while others are actually fake salespersons who do not represent any company and are bound to disappear once they receive payment from consumer. Consumers are therefore advised to make payment to the company after confirming that the company legally exists.

Paying hidden fees. Most companies includes hidden extra fess which should be calculated into consumer`s final cost. These may include postage fees. Many companies may require you email your own letters and thus pay for your own postage. If they are sending letters to each of the creditors, one will end up incurring a high fee for mailing dozens of letters per month. One should not be prompted into paying such mailing cost as it is already factored in the final cost.

Poor tactics. One should be aware of the tactics being used by the credit repair company such as who they will be sending credit letters to. The tactics employed should ensure that they can effectively track where the client is in order to send letters on behalf of the consumer. This may include an expensive software which most companies try to avoid. The consumer should ensure that the company is using certified mailing tactic in order verify that the creditor has received the letter.

As a result of competition from emergence various credit repair companies including scum credit repair companies, a consumer should be careful not to fall into tricks employed by these companies. One should ensure the company you hire is legal and conforms to Credit Repair Organizations Act.

Tips For Repairing Your Credit in 2014

6The recent economic decline has led to numerous problems within the country, both on a political as well as a personal level. One of these effects has been the rising rate of credit debt, caused by average people not being able to afford the same essentials with their current finances. As such, many normal, everyday folk have had to face an issue which, once upon a time, plagued only the frivolous spenders: bad credit.

As you probably already know, the effects of bad credit don’t just stop at one’s bank: along with the higher interest rates you will have to pay and the greater difficulty you will have in getting loans and credit cards, a low credit score can also prevent you from getting that apartment, having basic utilities such as electricity and sewage, be denied cell phone contracts or you can be rejected from employment and have to pay higher insurance premiums.

Once you are unable to pay your credit card bills, everything becomes more expensive and difficult for you, which leads to your income not increasing at the same rate as your debt. This causes your debt to rise again, leaving you in a vicious cycle in which nothing short of outside intervention can help you out of.

However, contrary to popular belief, it IS possible to repair one’s negative credit score, and it is not illegal: the Federal Trade Commission itself regulates credit repair via the Credit Repair Organizations Act. This act states that it is possible to remove negative credit if it is not true or verifiable. In most cases of bad credit, the negative items are not accurate, and and as such will not stand scrutiny.

Numerous companies will offer to help repair your credit, and one of the most difficult tasks is finding one which offers the best results within your budget and according to local laws. With a little research, it is possible to weed out the con artists from the actual companies.

It is best to avoid any company which is asking for payment up front, which promises a specific final credit score, or which states that it will be able to remove your negative credit score within a specific period of time. These such claims violate the CROA and the companies which make them are all the more likely to be a scam. Look out for hidden fees, places which lack customer service and lack of transparency as well.

Although the actual number of methods employed by credit repair companies is uncountable, with each considered a trade secret, most of them follow one basic idea: sending out letters to the various parties involved, such as the credit bureau, the collection agency, or the original creditor. The more recipients, the more tactics they employ.

Despite all of these efforts, permanent credit repair cannot be 100% guaranteed, as debt is seen as a commodity between companies, an asset which can be bought and sold. The likelihood of debt reappearing on your credit score increases the more public the transaction is.

Effective Things to Consider Before Hiring a Credit Repair Company

There are a few, important things that consumers need to be vigilant and careful about, in order to differentiate between legit credit repair companies from fraudsters. Below are a few tips you can follow which will guide you in choosing a legit credit repair company to hire, at all times.

Is there a warranty? – If a credit repair company doesn’t specify or offer any warranty it really means that they lack confidence in their work, which isn’t a good sign for a potential credit repair company. Also, it’s not supposed to be any kind of “warranty” rather it should be specific, it need to be “Performance” based. This is important because it’ll further proof how credible such a company is really worth.

Are they a member of any organization? – In many occasions where a company is a member of a certain organization, it increases its worth and credibility among its consumers. It also means that they’re potential people of higher standards, unlike others. So make sure the credit repair company you choose is a member of a certain organization, and it should also be registered. Similarly, this will assure you beyond any reasonable doubt that the credit repair company you choose to hire is legit and trustworthy.

Do they have a physical location? – Although this isn’t a must-have it’s actually really important, nevertheless. Not everyone who works from home as a credit repair is actually a crook and not anyone that has an office is ethical and honest. Actually in most cases, a higher number of dubious credit repair companies normally work from home, so it’s convenient you find a company that has an established physical location.

What are their billing policies? – Normally it’s illegal to be charged upfront for any credit repair company services, which means it’s not the ideal company to hire. Think twice when you’re approached by companies that want to sign you in an open-ended contract, where you’ll be charged on a monthly basis. The goal of most companies like these is to keep you for a long period as their client in order to collect immense revenue from you, to say the least.

Verify whether their contract has a defined rescission period – In many countries worldwide and most federal laws require this part to be declared in all credit repair companies’ contracts. Where you find a company has omitted this part on its contract it means they’re not compliant, and it will be a great risk to hire them.

Lastly, what is their procedure to update you? – An effective and efficient credit repair company, should have a defined path on how they work, and they should keep you updated of convenient matters frequently. On the other hand, most scam credit repair companies, lack an effective, defined path on how they normally update their consumers, which normally make them suspicious.

Above are essential tips and guidelines people can choose from, in case they need to hire a legit and trustworthy credit repair company. A huge number of scam credit repair companies are rampant everywhere nowadays. So people must stay vigilant and up-to-date with trending information, in order to outsmart such scam companies.

How to Make Sure the Company you Choose for Credit Repair is Following the Law

Having a poor credit history can have a negative effect on your day to day life. This is because you have a harder time acquiring assets like houses as well as cars and getting a job can also be a challenge. Having a good credit score helps you to refinance your debt for lesser premiums. If you have a bad credit history, a credit Repair Company can help you go back to enjoying great credit scores. However, this can only happen when you take your time choosing a company that actually follows the law to the letter.

Choosing a credit repair company can seem like a great idea for anyone with a bad credit history. Typical credit repair companies can charge a fee going upwards of hundreds of dollars for their service. This service can go for up to a year to complete. Choosing a wrong credit repair company can mean a waste of time and money for you. One of the areas you need to look into in a credit card repair company is whether it follows the laws governing credit repair.

There are several attributes you can look out for to ensure the company you choose is legal.

What to look for to known whether the credit repair company is following the law

First, a good credit repair company should be able to go through your credit report without charging for it. Your legal rights when it comes to credit repair include:

• The credit repair company you go for should be able to supply you with a copy of the consumer credit file rights under your state and federal law. It is important to read this document before signing any contract with the credit repair company.

• The credit repair company should not make false statements of the service it offers. Read the contract to make sure that the company is promising to offer everything stipulated in the contract.

• According to the law, credit repair companies should not ask you to pay before offering the services.

• You should be given time to read and sign the contract. After signing it, you should be given at least 3 days before the company begins offering the service. You can cancel the contract within these three days without being penalized if you want to.

In your contract, you need to ensure that the following information is well stipulated:

• A detail oriented description of the type of service the company offers. Your contract should clearly specify how and when the service will be performed.

• The terms of payment. This should clearly stipulate the total cost of the service, including all extra charges and fees.

• How long the contract is valid for. The time frame should be reasonable. Credit repair can take several months.

• The company’s name and address. This is the contact information you can use in case of any issues regarding the service.

Besides federal laws governing credit repair services, there are also state laws that govern credit repair services in the state. You can check with your consumer hotline, your local consumer affairs office or even your attorney general’s office to learn more about the credit repair laws in your state.

Key Factors to Determine The Best Credit Repair Company

The credit repair industry is growing rapidly as individuals rely upon credit reports for many purposes. A good rating on the a credit report can help you obtain a loan, rent an apartment and even get a job, while a negative rating may hinder you in these areas. For this reason, many people turn to credit repair companies to delete or remove negative items from the credit report. Of course, the companies perform this service for a fee, and how they charge and the tactics they use vary widely, in some cases violating federal law. Therefore, the first step to determine the best credit repair company, is to eliminate those that operate illegally.

11Before one selects a credit repair company, it is important to understand the standards and practices of the industry. The governing law for these companies is the Credit Repair Organizations Act (CROA), which regulates how a company must operate. So, before one selects a credit repair company it would be wise to be familiar with the standards in CROA, to determine if the company you contact complies with federal law. The most important rule in the Act is that a credit repair company may not collect any fees prior to rendering the credit repair or deletion service. All fees should be paid after deletion of items is complete, or at least has a monthly payment system that allows you to pay for the service incrementally. Of course, many companies have found ways to get around this requirement such as charging large set-up fees or including the service with another product such as a membership or consulting fee. Given that these practices are designed to skirt the law, a company that uses them should not be hired as potentially unscrupulous.

Another practice used by companies that violate CROA is to promise specific results from their credit repair service. For instance, they may guarantee that specific items will be removed or that the customer will receive a specific credit score when the repair is complete. They may also promise to repair your credit within a specific time frame, knowing many people feel an urgency to have their credit repaired quickly. All of these practices are illegal, and any company that promotes itself in this way should be avoided.

If a credit repair company complies with CROA, one still must evaluate how much they are charging for their service and exactly what is covered by the fees. Payment for mailings, certified mail and credit monitoring may be an additional charge for the customer, as well as charges for more advanced deletion methods that are not included in a “basic” or monthly service fee. It is advisable to clarify ahead of time exactly what is included in the proposed fee, and where other charges may be added to receive the best service.

Once you have eliminated credit repair companies that use illegal practices, you can focus on those with good qualifications and service reputation. A good company will have expertise and experience in credit repair, along with consistent customer relations and communications. The best companies will be happy to detail their methods and business standards to demonstrate their value. If you do your research thoroughly, you will find many excellent credit repair companies that have dedicated representatives ready to give your credit report personal attention with high quality service.