Are All Companies in the Credit Repair Service Industry Just Scams?

A Credit Article Contributed by Mark Mcclelland

The Lowdown on the Credit Repair Service Industry

Even though there are actually a couple of reputable credit repair service companies out there, the industry has been badly bloodied the last decade or so by a whole host of companies that make blatantly false claims and either fail to deliver the goods, or simply disappear with unwary consumer's money.

You see the ads all time, preying on basically honest folks who've run into a bit of financial difficulty and are looking for some help getting out of a sticky situation. And they all make the same basic claims: thy can simply 'erase' your bad credit history, they can help you create a new credit 'identity', they can have bankruptcies, judgments, and liens removed from your records even if they're accurate, timely, and legitimate.

The fact is that regardless of what the ads proclaim, neither you nor anyone else, including these so-called credit repair service companies, can force the credit reporting agencies to remove or re-rate items in your credit files if they're accurate, within the statute of limitations, and legitimately yours.

So, keep your hard earned money and save yourself the trouble of using a company that makes these kinds of claims. The only real way to repair your credit is to repay our debts, let the appropriate time limitations pass, and learn to monitor and control your spending habits.

How Can I Ensure That a Credit Repair Service is Legit?

If you think that using a credit repair service would actually be beneficial in your specific situation there are several tings you can do to help ensure that the company you're dealing with is legitimate.

According to the Credit Repair Organizations Act, credit repair services are obligated to give you a copy of the "Consumer Credit File Rights Under State and Federal Law" before you put your signature to anything - legitimate companies will do this.

Service companies must also provide you with a written contract that clearly identifies your rights and contractual obligations, and they must do this before you sign it, giving you the opportunity to review it and seek legal counsel and advice if you so desire.

Legitimate companies won't make outrageous claims, give you guarantees, or make promises that they might not be able to fulfill (especially since there are no guarantees in this business, well, except for the one that if don't know your rights, you're guaranteed to be fleeced).

Legitimate companies cannot, by law, charge you for any services rendered - and that includes "starting the process" - until they have completed all promised services; they cannot perform any services until you've put your signature on a written contract, and even then they have to wait three days to give you time to cancel the contract without incurring any penalties, fees, or other charges.

How Do I Report Credit Repair Service Company If I Think I've Been Cheated

If you've contracted with what you thought was a legitimate credit repair service only to discover that they may have conned you out of your money, there is a significant body of law on your side (no one, not even Congress, likes cheap con artists). Many states have passed regulations that strictly limit the parameters within which credit repair companies must operate.

The best place to start is with your local city or county consumer affairs office, or with your state's attorney general. Many state AGs have implemented toll-free hotlines specifically for this purpose. And don't be shy about using it. If you've been lied to and / or cheated out of your money, your AG wants to hear from you.