Beware the Claims of Credit Repair Agencies
"You can be debt free in two weeks!"
"See a credit improvement within 24 hours!"
"See a credit improvement of at least 100 points overnight!"
Does it sound too good to be true? If the answer is "Yes" then you are probably right. It is not our intention to generalize by saying that all credit repair and debt consolidation companies are purely out to make a profit without any concern for the well-being of their clients, but unfortunately many of such companies tend to veer towards the negative.
Oftentimes the consequences of working with credit repair agencies catch you off guard and leave you and your credit in a shape and place you never thought you would end up. In order to avoid being "tricked" into using their services, we must first understand the negative consequences we are so scared of happening :
Excessive fees. Credit repair agencies often charge excessive fees up front, during, and at the close of "repairing" your credit. Such fees may include a set-up fee, percentage charges, and other administrative fees.
Purposeful late payments. When it comes to ethical credit repair agencies, there are those that lack this quality. In these companies it is not uncommon to see installment payments under the control of the agency, being skipped in order for the agency to keep the funds as "earned income" on their part.
Their reflection on your credit report. Though more and more lenders and creditors are accepting the use and benefit of credit repair agencies, there are still leading lenders and creditors in the field that will not approve extending credit, leverage, or loans when credit repair agencies reflect on the credit report. Credit counseling agencies and credit repair agencies will often show on any and all credit inquiries.
Loophole methods of disputing. There are some "miracle worker" agencies that follow unconventional and illogical methods of "fixing" your credit. They find loopholes, which are of no long-term benefit to you. Such methods include bombarding the creditor with requests to investigate credit mistakes. If any requests cannot be attended within 60 days, the information will be removed from your credit. Of course this sounds great in the short term. But in the long term the information will be re-verified and if it is determined that it was falsely removed, it will return to your credit report. All in all, you are paying to "repair" your credit when the agency truly hasn't made a long-term effect.
This is not to say that all credit repair agencies are bad or ineffective. But there are two things to remember when you are searching for ways to improve your credit.
1. You can do anything a credit repair agency does on your own. It may take more time and more effort on your part but you can use all your money towards paying down and paying off debt rather than paying a third party to "try" to repair your credit.
2. If you do choose to obtain the services of a credit repairing agency, remember to research and investigate into the individual companies. If possible, even get a few referrals to contact.
When choosing an agency to work with, look out for lower fees and a good reputation. Any company that is willing to explain the process clearly and patiently is worth looking into for your credit benefit. But before deciding on using a credit repair agency, take the time to do the following:
1. Contact the BBB (Better Business Bureau) to get a review on the company.
2. Research into the certificate of registration, which will reveal lawsuits or complaints.
3. Do not pay for services before they are provided to you.
If you've already gone through a negative and more than disappointing experience with a credit repair agency, don't forget that you always have the right to have the company investigated. You can also submit a complaint to your local Conumser Affairs Office, the FTC (Federal Trade Commission) or your State Attorney General. Credit repair agencies are strictly regulated so any copmlaints or mistreatment of clients will result in a thorough investigation.
