Four ways to detect a credit repair scam
http://www.articlesdirectory.us/articles/112056/1/Four-ways-to-detect-a-credit-repair-scam/Page1.html
Stuart Hunter
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.
By Stuart Hunter
Published on November 20, 2009
The Credit Repair Organizations Act (CROA) has established guidelines credit repair providers must abide by that you can use to help identify a trustworthy credit repair company and avoid becoming a victim of a credit repair scam.
Four ways to detect a credit repair scam
The Federal Trade Commission enforces consumer protection law and has the responsibility of protecting consumers against companies that steal our business through false claims, illegal services, and improper disclosure. With regards to , practices like this became so pervasive that Congress passed a federal law to clearly 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 victimized by a dishonest credit repair organization.
When researching credit repair services, there are some key indicators alerting you to steer clear. According to the Federal Trade Commission, avoid credit repair organizations that:
Request Payment Before Services are Performed - Credit repair providers should not request payment they have worked on your case. Under the CROA, these companies cannot require payment until they have completed the services promised. This is to protect consumers from companies that charge large upfront payments and then never do the agreed upon work.
Fail to Disclose Your Rights - Legitimate credit repair companies will let you know that you have a right to order one free copy of your credit reports each year from each of the credit bureaus, and that you are able to dispute questionable items on your own. If you are not alerted to this information, specifically in the form of a CROA required disclosure titled "Consumer Credit File Rights Under State and Federal Law", you should probably look elsewhere.
Advocate Using 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 - Beware of credit repair services that promise to remove negative and accurate items, such as liens and foreclosures, from your credit file. No one can guarantee that items will be removed, especially if the items are true.
When researching credit repair services, there are some key indicators alerting you to steer clear. According to the Federal Trade Commission, avoid credit repair organizations that:
Request Payment Before Services are Performed - Credit repair providers should not request payment they have worked on your case. Under the CROA, these companies cannot require payment until they have completed the services promised. This is to protect consumers from companies that charge large upfront payments and then never do the agreed upon work.
Fail to Disclose Your Rights - Legitimate credit repair companies will let you know that you have a right to order one free copy of your credit reports each year from each of the credit bureaus, and that you are able to dispute questionable items on your own. If you are not alerted to this information, specifically in the form of a CROA required disclosure titled "Consumer Credit File Rights Under State and Federal Law", you should probably look elsewhere.
Advocate Using 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 - Beware of credit repair services that promise to remove negative and accurate items, such as liens and foreclosures, from your credit file. No one can guarantee that items will be removed, especially if the items are true.