Credit repair services are companies that scrutinize your credit reports and deal with any inaccurate or negative items on your behalf. Credit repair companies are different from credit-counseling companies in that they help you dispute inaccurate information at a fee.
If you have a bad credit or you have identified some errors in your credit reports, you might consider searching for credit repair services.
Here are some tips to help you verify a credit repair company:
Read online reviews of the company
The best website to read online credit repair company reviews is the better business bureau website. It gives you an option to check out both accredited repair companies and non-accredited repair companies. It also avails other client reviews, which is a good way to determine whether the company is competent. Most accredited credit repair companies will be listed here and their contact details and location included.
Search for any complaints against the company
To check for complaints about the company, you just need to search the complaints database from the consumer financial protection bureau. This website publishes consumers’ complaints and dissatisfaction towards a certain company’s products and services. To weed out illegitimate reviews, the website confirms a financial relationship between the consumer and the company before including the consumer’s complain on the database. In most cases, companies that have too many complaints are not competent, which means that they are likely to disappoint you.
Characteristics of a credible credit repair company
- It is licensed, bonded, and insured hence follows the state and local laws
- Provides free consultation and lists its limitations clearly in regards to the required tasks
- It has a clean track record and a good reputation of solving similar tasks
- It offers a performance warranty and clearly explains your options in case it is not able to remove all your disputed items
How do you identify a credit repair fraud?
1) The company asks you to claim identity theft in order to remove accurate information from your credit report. The company can also promise to remove this information.
2) You are asked for an upfront fee. The credit company may ask you to pay even before the tasks are done.
3) The company asks you to sign a contract that lacks the following details:
- The tasks being carried out on your behalf
- The amount you are charged for the tasks
- The time limit within which the tasks should be complete
- The name and address of the company
- A statement informing you that you can do away with the contract within three days
4) The company pressures you into signing the contract even before you fully understand its terms
5) The company fails to provide you with a credit consumer file rights. This is required to inform you that you can dispute inaccurate information on your own without the need to involve a credit repair company.