It’s been a rough recession, and so many people are finding it hard to get credit, so they might be apt to look to a “credit repair expert” to help them. But, watch out! They’ll scam you!
Or, so the media would like you to believe. You see, it’s an easy story to write. Visit the FTC page on credit repair, grab their bullet list of things to look out for in a credit repair scam, and write an article about how shady credit repair bad guys are lurking around every corner ready to part you with your savings. But it’s just not the case anymore… in 2013.
There was a time that this was true (like, twenty years ago). Credit repair was such a new business that not everyone understood what it was, so everyone handed over thousands in cash to someone who said they could create a “new credit ID” and then would either take off with the money, or get you in trouble with the law. (No, don’t create a fake credit ID. You’ll go to jail.)
See, the FTC has come down hard on credit repair shops that play on the line of nefariousness. These are the small-town shops that don’t use a lawyer to back their services, nor do they have any sort of published results to back up their claims of being “the #1 credit repair company in America”. But times have changed, and so has creidt repair. While it’s still a hot 6-o’clock news story most people are realizing that over sensationalizing is the nature of the media beast. But let’s get over it.
Here are some Myths of Credit Repair Scams:
1 – All Credit Repair is Illegal.
- Hiring a company or law firm to dispute items on your behalf is not only “not illegal”, it’s precisely written in the Credit Repair Organizations Act, the same act that says exactly what a consumer can and can’t do to repair their own credit. In fact, the reason the FCRA and CROA were written in the first place was to protect consumers against the billion-dollar for-profit companies that use their own personal information, not to detour them. If hiring a legit service is what works for you, then by all means, do it. But what if you could simply download your credit report and dispute your questionable items right there?
2 – The FTC only regulates the little credit repair firms. The FTC has an obligation to ensure that every company that offers credit repair services is following the guidelines it has set forth to protect consumers. Big consumer advocacy law firms like Lexington Law will naturally have a large target on its back since they help more clients than any other company. So, they have set their standards to be above and beyond what the FTC requires.
3 – Because of FTC efforts, you are now safe from scams. While most nefarious persons offering illegal credit repair or scams have been taken off the streets, or scared off from trying to find bad credit victims with expendable money, desperate for a good credit rating, there are plenty of credit repair services on the edge of bad practices that should be avoided. Asking for money up front before services are rendered, or guaranteeing that you’ll see results should you sign up with them. Or even failing to let you know that their service is something that you can complete on your own should you choose.
Let’s face it, credit repair isn’t rocket science. And the reason people hire a company to do it for them is because to see results, you need to be dedicated and consistent in your follow-through with the bureaus. It can take up to 12 months of back-and-forth with the credit bureaus to see satisfactory results, and most people just don’t have that kind of fortitude. As a wise man once said, “Time is money, and I’d rather spend it with you.”
But for others, simply paying for their credit report and disputing directly through the bureaus is the best option.
On Shooting Authority you will find more information.