Credit Repair Scams: What You Should Know


Have you been contacted by a credit repair company claiming that they can improve your score? Some credit repair services will claim they can improve your score almost immediately. It is another matter that immediately is vaguely defined and it could be several weeks, in some cases months, before you witness any substantial change. Credit reports are not etched in stone. They get reviewed all the time, whenever there is a reportable transaction or a relevant update that must be acknowledged. Credit repair is indeed crucial, especially for those who have inaccurate entries on their file and those who have an average or outright poor credit history. This does not imply that you should hire a credit repair company randomly, hoping that everything will be alright in no time. If you have to avoid falling into the traps set by credit repair scams, then you should take the following steps.

  • Do not make any upfront payment for credit repair services. This should always be nonnegotiable. There is no reason why you must pay anything to anyone unless you actually get a service. Even attorneys at law do not charge any fee in various types of cases until the verdict is in favor of their clients. Why should you not have a similar approach when dealing with a credit repair company? It is absolutely reasonable for consumers to pay a deserving fee to a credit repair company but only when they get the job done. It is actually illegal for credit repair services to ask for upfront payments. Even if they do with clear terms mentioning and explaining how the company would go about improving your credit score, there should be a refund clause if the desired outcome remains unaccomplished.
  • Credit repair companies may promise instant remedies but there is nothing that happens overnight. Credit repair cannot happen immediately as the bureaus will take their time to review all your claims. If you are being advised to take certain steps then those would also be reviewed in due course of time. Let us presume there is an inaccurate entry on your credit report and you must have it removed. You can hire a reputed credit repair company to report the wrong entry to the bureau. The bureau would acknowledge the request but it has thirty days to respond. Hence, it may take anywhere from a week up to five weeks for you to get any response from the bureau. This response may or may not be what you expect. If there is a serious wrong entry then removing it may have an immediate positive impact on your credit score. The entry may be accurate according to the bureau so it would not be removed and hence your credit score remains unchanged. You can subsequently file another request with more supporting documentation and it is possible your credit score will eventually improve when wrong entries are proven to be inaccurate and are removed from your file but all of this takes time. There is no instant remedy. Processes are time consuming and everyone has to endure them.
  • You must be allowed to contact the bureau yourself. Hiring a credit repair company does not mean you cannot contact the helpline or correspond with the specific bureau that has inaccurate information in your credit history. You may not file another request when a credit repair service has already filed one on your behalf as it would only perplex the matter further but you are free to contact and consult anyone you want. You should also not be lead to believe that you can dispute accurate information on your credit report. Do not initiate any such request as it would simply lead to nowhere. There is no easy fix to a major credit score issue. Wrong entries can be challenged and must be. They must be removed but accurate entries must be there. You may choose some smarter ways to have unfavorable information unreported to the bureaus. You can write a goodwill letter to lenders and ask them to not report any late payments or if you are settling a debt. A reliable borrower who keeps repaying on time may have such goodwill letters responded in kind and as per expectations. However, trying to outsmart credit bureaus will not be wise for anyone.

Finally, a credit repair company must always explain to you all the rights at your discretion and you must be allowed to exercise any and every one of them when the time is right. A credit repair service should be empowering, not limiting in any way. Read and find out as much as you can about a credit repair service and only hire a trusted company. Credit repair is a quintessential part of financial planning these days. You should deal with it in the most astute manner possible.




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