What is a credit repair agency?

A credit repair agency is a company that offers to repair your credit for a fee. These companies improve your credit score by cleaning up your credit reports by having the bureaus correct errors and remove erroneous charges. But, is a credit repair company essential for the health of your credit? Keep reading to find out.

Tips for using a credit repair agency

If you are considering hiring a company to help you clean up your credit reports, make sure you have security measures in place and find a serious company like Lexington’s law.

Credit repair companies often have a bad reputation, but that doesn’t make them all bad or unscrupulous. If you decide that a credit repair company can help you, there are a few things you should check before getting started:

  • Don’t sign a contract until you’ve reviewed it – You should always get a copy of the contract in writing before signing. Review the fees charged by the credit repair agency, carefully consider what it says it can do for you, and make sure you’re not locked into a long-term contract. If a company won’t allow you to have a written agreement or let you walk out of an agreement you’re not happy with, you should reconsider.
  • Research the company with the BBB – It’s good practice to always check reviews from the Better Business Bureau and pay attention to consumer reviews as well. If the company has too many complaints, you should proceed with caution. Also beware of organizations that don’t have negative reviews. When researching, a good tip is to look at all intermediate reviews first. You can also ask the company for information about satisfied customers.
  • Make sure the company is bonded – A bonded company has deposited money to protect its customers against fraud or in the event of bankruptcy. Some states require credit repair agencies to be bonded. Using a bonded company is not a guarantee, but it does give you an extra layer of protection should anything go wrong.

Protect you by law

Due to the reputation of these organizations and the tendency of some services to use fraudulent methods, including defrauding consumers, the government has put in place the Credit Repair Organizations Act (CROA). The CROA is designed to protect consumers from dishonest companies. This law helps consumers know their rights when using a credit repair company.

Under the CROA, a credit repair agency cannot legally:

  • Alter your identity, or advise you to do so – this includes applying for/using an Employer Identification Number (EIN) to wipe the slate clean of your credit history.
  • Telling you to lie about your credit history or lie on your behalf – this applies to current and future creditors.
  • Lying about the services they can provide.
  • Ask you to pay for any service before it is completed.

When you enter into business with a credit repair company, the CROA stipulates that they must provide you with a contract and provide a three-day cancellation window. It is only once this window has passed that the company can start the process.

Credit repair services are also not allowed to insist that you sign a form that waives your legal rights. If an organization breaks these rules, you have the right to protect yourself by taking the company to court. This right extends for five years, either from the date on which the damage occurred or from the date on which you become aware of it.

Save money by doing these tasks yourself

It is not necessary for a credit repair agency repair your credit. Yes you plan to do some of the same things they do, it will all cost you time.

For example, you can monitor your credit reports for free, check for problems, and write to the credit bureaus to correct those errors, or let them know if some of the items on your credit reports don’t belong to you. You can also build a better credit profile by paying all your bills on time each month and avoiding high credit card balances.

One downside to the do it yourself process is that you have to follow up with the credit bureaus regularly to make sure your reports are corrected, which can be time consuming. Also, you may not have the expertise of a qualified credit counselor, which could be a downside.

Are you ready to take the leap?

If your credit needs repair, it’s something you can do yourself. In addition to fixing negative marks that appear on your credit reports, you can also improve your credit history by getting a car loan. It’s a great way to have a positive impact on your credit.

Not only does a car loan add a new installment line of credit to diversify your credit profile, but making all your payments on time also helps build a positive payment history. Payment history is the most important factor that contributes to your credit score.

If you’re worried about not qualifying for a car loan because you’re thinking about repairing your credit, think again. There are special financing dealers across the country that have lenders willing to work with people who suffer from bad credit, no credit, and even bankruptcy. AT Auto Express Credit, we can help point you in the right direction by connecting you with a local dealer. Start the process today by completing our easy car loan application form now.

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