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Finding a Credit Repair CompanyA credit repair company can come in a plethora of different sizes and shapes. It can be legitimate or disreputable. Reputable credit repair companies will tell you they will help to erase "inaccurate" entries from your credit report and will provide you with a detailed contract. A detailed contract will contain a summary of all your legal rights under Federal law. Additionally, reputable credit repair companies will tell you that you have three days following the execution of the contract in which to cancel the contract, at no cost to you. You can believe that a credit repair company is disreputable and a scam if it: - claims to be your only source of assistance. In actuality, you can do anything that credit repair companies can do and it won't cost you anything but time and possibly some level of frustration; - offers a program which creates a new "credit identity" for you, also known as file segregation. Your credit report is associated with your social security number. In order for these bad credit repair services to "create" a new credit identity for you they will ask you to apply to the Internal Revenue Service for a tax identification number and then use this new number to establish credit in your name. This all sounds really great and simple; however, IT IS AN ILLEGAL ACT! BEWARE OF ANY CREDIT REPAIR COMPANY WHICH REQUESTS THAT YOU DO THIS!; - offers to remove correctly reported entries from your credit report. Correctly reported entries cannot be removed from a credit report and will remain on your credit report for seven years, ten years in the case of a bankruptcy; and, - it does not offer a detailed contract. The Credit Repair Organizations Act contains the federal mandate to oversee credit repair businesses and their practices. Federal laws dictate the specific services which may be legally provided by a credit repair company. Keep these things in mind before deciding to use a credit repair service: 1. Beware of any credit repair service which suggests the creation of a new "credit identity"; 2. Do not contract with a credit repair service which promises to remove all negative entries from your credit report. Only inaccurate information may be removed. All "true" entries will remain on your credit report, whether they be positive or negative in content; 2. Have doubts about a credit repair service if it does not explain your legal rights to you and does not explain that you can fix bad credit on your own; 3. Don't consider a credit repair service that requires you to pay for services prior to receiving those services. The Consumer Credit Protection Act, Title IV - Credit Repair Organizations, Sec. 404 - Prohibited Practices, contains the following, "No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is FULLY PERFORMED."; 4. Stay away from credit repair services that advise you not to contact a credit reporting agency directly; and, 5. Be wary of those credit repair services which request that you waive the three day "cooling off" period following the execution of the contract. Be careful in your selection of a credit repair company . Remember, there are disreputable credit repair services out there that will do next to nothing to help you and may even request that you do something illegal. On the flip side, there are reputable credit repair companies in existence...just remember to do your homework to be sure they are indeed reputable! Please visit our First Time Home Buyer Home Page!
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