Under the Fair and Accurate Credit Transaction Act (FACTA) of 2003, the credit bureaus can ignore all claims made by third parties venders to include attorney firms, who send out dispute letters on the consumerâ€™s behalf. That means the law firms and internet companiesâ€™ attempts most likely will not be successful. This is why Credit Justice Services is the only credit repair company that has the consumer send out their dispute letters on their behalf. This type of transparency allows the consumer to stay involved during the processes. I believe it is the lack of transparency by the other credit repair companies which has given our industry a bad reputation
There are reputable credit repair companies that can help consumers fight negative information in a timely and direct manner. People should look for companies that are open and transparent about the credit repair process. These businesses should provide a clear-cut timeline for the credit repair process, generally between 60 and 120 days.
Consumers should also look for a company that will offer a money-back guarantee. This can indicate that the credit repair company truly is focused on helping the consumer.
Find a company that provides a detailed process for disputing the negative items. The repair company should have the clients review and sign each letter to ensure that the credit bureaus take the dispute seriously.
Another feature of a good credit repair company is that it offers more than just bureau verifications. A reputable company will also give clients additional services, such as negotiation of collections and other debt, as well as identity-theft monitoring and clean-up.
The best repair companies will have an attorney on staff who understands the complexities of the credit laws and who oversees individual disputes. By carefully following the legal guidelines set forth by many United States laws, a credit repair company will be successful on behalf of its clients.
Just a little bit of investigation could stop an individual from making the wrong choice when deciding which credit repair company to use. Keep the aforementioned guidelines in mind when seeking out a credit repair company for you and your clients.
Conversely, watch out for the following warning signs when researching repair services.
10 warning signs of a fraudulent credit repair company
1. Collects money up front BEFORE the work is completed.
This is illegal under the Credit Repair Organization Act (CROA). Agents and consumers should beware of companies requiring any investments before the work is completed.
2. Charges a monthly fee without a specific completion deadline.
Some of these companies are paid monthly, so there is no incentive for them to expedite the repair process.
3. Refuses to show the consumers dispute letters sent out on their behalf.
Transparency is incredibly important to the repair process, and the client should have the right to see any letters sent on his or her behalf.
4. Makes guarantees that an individualâ€™s credit score will increase by a numerical amount or that a negative trade line will be removed.
No one should make any guarantees. If a company pledges that a score will increase by a specific number or that a negative item will be removed, then the consumer should be wary. Companies that make these promises are breaking the law.
5. Suggests that consumers shouldnâ€™t contact the credit bureaus directly.
If a repair company doesnâ€™t want clients to contact the bureaus, then it may not be sending out any dispute letters.
6. Doesnâ€™t inform consumers that they can repair their credit on their own.
Anyone can repair his own credit, but it takes diligence and time. The dispute process usually requires three rounds of letters per unwarranted trade line to each credit bureau. Thatâ€™s nine letters for every inaccurate or negative trade line, and that can require a lot of time.
7. Encourages clients to falsify or dispute information about legitimate claims.
If a company asks a person to falsify the information, then that individual needs to run. These companies may also offer a fake credit account to increase a personâ€™s credit score. Then the company reports this fake line of credit to the bureaus hoping that it will enhance its customerâ€™s score.
8. Doesnâ€™t inform consumers of their legal rights and the laws that protect them.
A good credit repair company will inform the client about all of his legal rights under the FCRA. If the repair company doesnâ€™t offer this information, then the consumer should ask for it.
9. Recommends that a person create a â€œnewâ€ credit identity.
You canâ€™t create a new identity. Some unscrupulous companies will use illegal means to get a new social security number for you, but this practice is unethical.
10. Offers a â€œpiggybackâ€ to help with clientsâ€™ credit scores.
Piggybacking occurs when an individual becomes an authorized user on the credit-card account of another person with excellent credit. Over the period of a few months, the unknowing consumer has his score used to increase the piggy backerâ€™s rating.
Using a reputable credit repair company can truly enhance your buyersâ€™ credit scores. Beware of the 10 warning signs above, and look for a company that is transparent. Have your clientâ€™s credit score cleaned up before the financing process begins, and youâ€™ll reap a happy and loyal customer.
Douglas Muir, CEO