Credit Repair Services Can Do More Harm Than Good

Lexington Law Firm claims to be one of the top credit repair agencies. For a startup fee and monthly charge ranging from $40 to $80, you can have lawyers working for you to repair your credit. This may seem a little pricey to some, but credit repair services are popping up everywhere in this economy that requires a high credit score to get approved for credit and qualify for the best interest rates. While there are many credit repair services that actually help consumers, there are numerous companies that are unscrupulous and do more harm than good.

The saying “ignorance is bliss” truly does not apply in the world of credit and credit scores. Credit repair companies trying to scam consumers prey on the ignorant and uniformed. If you know your rights, you can spot a credit repair scam easily—knowledge is your best defense!

Fraudulent credit repair companies share a few commonalities that you can be watchful for. First of all, walk away from any company requesting fees in advance. These companies can take your money without offering you much, if anything, in return. Also be leery of any organization guaranteeing results. There is no way to know exactly how much your credit score can improve after repairing your credit, therefore, no one can guarantee to get you to a particular credit score. Additionally, you know you are working with a fraudulent company if they try to get you to change your identity by getting a new social security number, acquiring an employer identification number, or EIN, or trying to get a new credit history. Not only is that a scam, it’s against the law. Never trust a company that does not disclose your legal rights, advises you to lie about your credit history to anyone, or misrepresents the services that they provide to you.

Once you choose a credit repair service, be mindful of how they operate. Never let them fool you into believing that they can do something to repair your credit that you can’t do yourself. Also, some credit repair services use a trick to improve your credit temporarily—they dispute all of your derogatory items on your credit report, whether the items are accurate or not. This may result in derogatory items being removed from your credit history, however, they will reappear the next month. Don’t be fooled!

Your credit repair service should offer you a contract. In this contract, you should find out how much you have to pay, what the company can do for you, how long the process will take, and the opportunity to cancel the contract within 72 hours. Remember you have rights under the Credit Repair Organization Act, and no credit repair company can infringe upon or violate those rights.

While it can be beneficial to seek the help of a credit repair expert, or credit doctor, you need to be careful who you choose. The credit repair market is filled with shady practices, high fees, and false promises. There is nothing honest about finding loopholes in laws meant to benefit the consumer to temporarily boost someone’s credit score—that’s a scam. Your best bet is to repair your credit yourself. If you do decide to seek outside help, just be wise and be informed.

If you feel like you have already been a victim of a scam by a credit repair service, you do have some recourse. You can report the company to the attorney general of your state. You can also submit a complaint to the Federal Trade Commission as well as the Better Business Bureau. Though you may not be able to recover any funds you may have lost, you can prevent others from being scammed in the future.

So maybe you’ve decided that a credit repair service is not for you—know that you can do it yourself. You can request all three of your credit reports for free. Just visit www.annualreport.com. You are entitled to one free credit report from each of the three credit bureaus annually. As a consumer you have the right to dispute any inaccurate data on your report. Remember, no quick fix for your credit is going to beat paying bills on time and budgeting. You have the power to improve your bad credit—don’t put that power in someone else’s hands!

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