Are Credit Repair Services Legal?

DThe thought of credit repair services is a frightful task for many consumers. Where should you begin? And how do you know that the company that you have decided to go with engages in legal and ethical practices?

While credit repair is legitimate financial service, there have been companies that saw an opportunity to make fast money and capitalized on people who already faced financial hardships. As a result the entire industry has become tarnished, with Americans not knowing who to trust.

Check the BBB
The Better Business Bureau should be one of the first resources for consumers whenever a financial decision is being made. They won’t have reviews, but they will have an overall BBB Rating. It’s graded on an A through F scale and should give you a general idea of how the company generally does business. They will also list any complaints lodged against the company over the past 3 years.

Know Your Rights
In 1996, the Credit Repair Organizations Act (CROA) was signed into law in an effort to protect consumers from credit repair companies who used unfair or deceptive practices. The law ensures that a credit repair company can’t make false claims about their services or charge you until they have actually started work on your account and completed the tasks that they said they would complete.

Know the Laws
Even if you decide to use a credit repair expert, you are still going to want to follow along with the process. Credit repair leverages federal and state laws to try and make your credit report as accurate as possible. While you don’t need to know the laws in depth it’s a good idea to know the basics of the Fair Credit Reporting Act (FCRA), the Fair Debt Collection Practices Act (FDCPA) as well as the Statute of Limitations for your particular state.

Be Honest
Credit repair is designed to get your credit reports accurate. This does not mean disputing every negative account in the hopes that it might be removed. If you know a derogatory account is yours, be prepared to deal with it. Credit repair is not designed to dispute accurate accounts that are hurting your credit profile. If you challenge an outstanding debt that is accurate, you are more than likely only making the situation worse for yourself.

Ask Questions
Any reputable credit repair company should be completely comfortable with questions about their process or tactics. Legal credit repair services are very useful when done properly. You want to find a company that takes pride in the fact that they know that they’re providing a valuable service to their clients and while also being knowledgeable about all of the state and federal laws that they’re required to comply with.

With so many people using your credit reports to base their decisions about you, don’t you owe it to yourself to make sure that your credit repair is done right? If you follow these few outlined steps, you’ll be sure to find legal, ethical credit repair services that are right for you.