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4 Signs Your Credit Repair Company May Be Ripping You Off

Last Updated: May 26, 2018

Sometimes life gets in the way and you simply don’t have enough time to repair your credit on your own and may need the help of a credit repair company. After all, filing credit bureau disputes with the three major credit bureaus (Experian, Equifax, and Transunion) can take weeks of mindless back and forth.

If you feel like you need to fix your credit immediately and want outside, professional help, here are four things you should be aware of before paying for a credit repair service and choosing a credit repair company.

1. If the Credit Repair Company Requires Payment Upfront, Run for the Hills

Under a piece of legislation called the Credit Repair Organizations Act, a credit repair company cannot charge you ANY money until after it completes the service.

The credit repair company cannot request fees until it has produced a credit report at least six months after the promised results show it fulfilled its promises to you. This means that if the credit repair company uses “telemarketing” and promised you a 200-point credit score increase in six months, that company cannot collect its credit repair fee until it proves that it fulfilled its promise 12 months later.

Again, no form of upfront payment is legal according to the Credit Repair Organizations Act.

2. If it Sounds Like it’s Too Good to Be True, Then it Most Likely Is

If the company you’re considering hiring has promised a specific score increase in a short period of time, don’t believe it. Updating a credit report takes time, and no one can guarantee a specific score.

3. If the Company Can’t Clearly Explain its Process, That’s a Red Flag

We understand. You’re hiring a professional because the credit dispute repair process can get complex. You’re paying credit repair experts so you don’t have to become one.

However, if the company you’re considering using cannot explain how it will fix your credit score, it’s a red flag.

Do your homework. Make sure you understand the credit repair process. Make sure you understand exactly how much the service will cost. You’ll need to have a written contract that outlines all of these details. The contract will also serve to determine if the company delivered on its promises.

4. If the Company Asks You to Lie, Don’t

FinancialAdviser.com’s final word of caution: Never hire a company that asks you to lie.

For example, an illegitimate credit repair company may advise you to create a new credit identity with an Employer Identification number versus your Social Security number.

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Prefer to work with a professional?

One of the quickest and easiest ways to remove negative items from your credit report is to work with a professional. There are attorneys and legal advocates who’ve made it their job to handle the debt collection agencies and credit bureaus for you so you can rest easy.

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