Credit Repair Companies-Buyer Beware!
After some unfortunately bad financial decisions, you find yourself with a very low credit score and collections agencies hounding you on a daily basis. You are desperate to find a way out of this mess that you have landed yourself in. The credit repair commercials on TV and radio seem so attractive. They claim they can make all your credit woes go away with magic solutions that seem almost too good to be true. Well, most of the time these claims are really not true and may even be illegal. Although legitimate credit repair companies do exist, you must be aware of some very key facts if you plan to sign up with one.
· One tactic that some credit repair services use is they claim they can get you a new credit identity. They do this by applying for an EIN (Employer Identification Number) and tell you to use this instead of your SSN. This is totally illegal because an EIN is meant only for businesses to use, not individuals. If you are not a business, obtaining an EIN for credit repair is a crime.
· If the credit repair company plans to dispute information on your credit report that you know is correct, then this should be a clear indication that this company uses deceptive practices that may land you in more trouble. You should only dispute information in your credit report that you feel is inaccurate or incomplete.
· No reputable credit repair company will ask for any sort of payment before they have completed the actual credit repair services that they have promised. The Federal Credit Repair Organizations Act protects consumers from this very thing. Do not sign any contracts that ask for upfront payments, before services are performed.
· Before signing up with the credit repair company, they should provide you with a free copy of the FTC’s “Consumer Credit File Rights” which outline exactly what can and cannot be done by the repair service.
Don’t be fooled into the trap that some of these credit repair services lay out there. The only real way of repairing bad credit is by using legitimate methods, and these can be done all on your own. Start paying your bills on time, all the time. Stop accumulating unnecessary debt. Best idea of all, make yourself a budget, and stick to it.
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I would suggest always investigating a credit repair company with the Better Business Bureau. You will find that the majority have many complaints. Find one with low prices and a good reputation and you will be okay. Also, they should focus on educating the customer as well as doing their disputes etc.