Beware! - Do Not be a Victim Of Credit Repair Scams

When you have bad credit, you are desperate to do all that you can to repair it. This makes you vulnerable to scammers who take advantage of your dire circumstances and make you the target of their frauds.

The Credit Repair Organization Act (CROA) has empowered you with rights so that you can be protected from unscrupulous persons. This law came into place to protect you.

What Credit Repair Organizations must do?

When you approach a credit repair company, they must follow certain regulations as given below:

• You must be given “Consumer Credit File Rights under State and Federal Law”, a disclosure by the company so that you can read about your rights.

• Before they provide you with repair services, they must first give you a contract that contains details like the amount that you must pay the company.
• It must contain the date of commencement of the services and also the date on which the credit repair will be completed.

• It must contain a detailed description of the services being provided to you.
If you cancel the contract within the stipulated 3 days, you should not be charged by the company for the cancellation.
• Under the CROA, you have to right to cancel the contract within 3 days even if you have signed it. The contract must clearly state this.
• Your contract should include a “note of cancellation”.

What credit repair organizations cannot do?

The CROA also lays down regulations that clearly specify what the credit repair companies cannot do:

• They cannot ask you to sign a waiver of your rights under CROA.
• They cannot provide you false information about your credit history to secure business.
• If they advise you to get a new Employer Identification Number or a new Social security number, it is illegal.
• They cannot ask you for advance fees before providing you with the services.
• They cannot promise to get accurate information removed from the report.

Repair bad credit yourself

The credit repair companies do not have any magic wand. If you are too lazy or too busy to get into the hassle of disputing the items in your credit report, you can always seek help from a credit repair company of repute. It is very much legal. But you should know that even they take the same time as you will when you begin with bad credit repairs. If you wish to repair bad credit, begin by disputing erroneous information by writing a letter to the bureaus.

If you find that despite all precautions, you have been scammed, report the company to the CROA and the State Attorney General.