There are many firms that offer credit repair services and for people, deciding which company to consider might be confusing.
It’s significant to bear in mind that whenever you might seek financial advice from the counselor, you may have to reveal some important data. Obviously, seeking aid from the incorrect source might be dangerous and can even result in much more serious problems.
How can you distinguish a legal and ethical credit improvement service from a long list of agencies in the market? Consider the following tips:
Check the BBB.
The Better Business Bureau gives an overall rating of different companies in the US. Of course, you want to look for a credit repair agency with an A rating. You will also be able to check from the BBB if there were complaints or law suits filed against a company as well as the result of the cases.
Know the credit repair process.
Turning to a credit counselling agency for help does not mean you will not need to do any work. You should be clearly aware of the exact steps that will be made to improve your personal credit.
If a credit repair agency promises to improve your credit in a short time without explaining how it can be done, you should take your business somewhere else. Partnering with an agency that employs illegal credit repair processes will not solve your problem. In fact, you could find yourself stuck in an even worse situation.
Know your consumer rights.
You should be well aware of your rights as a borrower. For example, debts that are over 7 years old can be erased from your credit report. In addition, creditors can no longer collect debts if it is passed the Statute of Limitations. However, if you did owe those debts, then you have the moral obligation to pay your creditors.
Unauthorized charges, incorrect items and outdated information such as a record of bankruptcy or foreclosure older than 7 years can also be removed from your credit report. You can do this process on your own by sending a dispute letter to the credit bureau that issued your report. By cleaning up errors from your report, you can significantly boost your credit score.
Say no to upfront payment.
If a credit counselling agency asks for an upfront payment before providing assistance, then you are most likely dealing with an illegal company. The Federal Law prohibits organizations that offer credit repair services from collecting payment before rendering service. Furthermore, credit counselling companies should not collect excessive fees since they are assisting customers who are stuck in bad credit or financial crisis.
Make sure it’s really non-profit.
Some credit repair agencies or organizations claim to be non-profit when in truth, they are not even licensed. You may come across “non-profit credit counselling groups” that demand unreasonable charges in exchange for their services. Before signing up for service, do your research first and make sure that the company is legitimate and reputable.