Understanding the Credit Repair Organization Act (CROA)
The Credit Repair Organizations Act (CROA) another credit law, was established by the Federal Trade Commission to ensure that “prospective buyers of the services of credit repair organizations are provided with the information necessary to make an informed decision regarding the purchase of such services; and to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. “
In other words, the CROA protects consumers interested in purchasing credit repair services from unfair, illegitimate or ineffective services. That’s because violators of CROA are operating illegally—and in some cases, their services could complicate the credit repair process significantly and/or cause unnecessary hardship on overwhelmed credit consumers.
The CROA thoroughly states the guidelines credit repair businesses must follow while performing services, as well as consumers’ rights in regard to credit repair. Listed below are five of the most important laws to know when dealing with credit repair agencies.
A credit repair organization:
- Cannot guarantee removal of negative items
- May not attempt to “create you a new credit file”
- Cannot advise you to be dishonest about your credit history
- Must not accept payment until services are performed or completed
- Must inform you of your rights to repair your credit on your own
These laws are especially important to know due to the widespread scrutiny of the credit repair industry and its common association with credit repair scams. Knowing your rights under the CROA can help you to identify illegitimate or ineffective services when it comes to fixing your credit with the help of a credit repair organization.
You can learn more about the CROA and other laws that help govern the credit and credit repair industry by visiting the Federal Trade Commission’s website at www.ftc.gov, or by speaking with a credit expert at My Credit Group.
