Credit Repair Services 101: Red Flags to Watch Out for, Your Rights and Choosing a Legitimate Company

Under the “Credit Repair Organization Act” it is illegal for credit repairers to lie about what they can do for you, and to try to make you pay before they have even performed any services. These are red flags to watch out for when comparing credit repair service offerings. There is the “DIY” approach, but it can be lengthy and complicated depending on how screwed up your credit reports are.

The ideal company will request copies of your TransUnion, Experian, and Equifax reports and review any derogatory marks such as write-offs, bankruptcies, late payments, tax liens, and so on. Also, did you ever check if you were one of the millions of Americans affected by the Equifax hack? Hurry up and do so if you haven’t already. If any of your personal information is vulnerable to identity thieves, you’ll want a credit recovery company with lawyers to help you prove you’re a victim.

The CROA requires any such company you work with to explain your rights to you in a written contract, in addition to detailing the services they will provide. No company can make specific promises. If you don’t get proof that they are doing everything they can to help you, you have the right to sue them in federal court.

Avoiding Scams with Credit Repair Services

Avoid scams by watching for red flags and only partnering with an organization that has a long-standing positive reputation. What are some of the strategies that a legit company will implement to help you restore your credit? It will devise a plan to dispute errors and try to remove as many negative items as possible using legal methods. The reason why it is ideal to work with such a company rather than take the do-it-yourself approach is that they know how to negotiate with creditors and will do it on your behalf. Tired of being harassed by obnoxious debt collection agencies? Just opt ​​for credit repair services, including sending cancellation letters to the collectors.

It may not be a good idea for you to apply for new accounts to try to add positive information to your report to make up for the bad, so be careful of any company that will try to get you to do this. If you have had trouble managing your debts in the past, it may not be the right time for you to apply for new lines of credit/loans. Depending on how low your credit score is, you may not even be able to get approval for new credit accounts, and applying for one will negatively impact your credit scores because of “soft blows” anyway.

Now that you know how credit repair services can help you, provided they’re fair and legit, you can get started cleaning your reports. Simply request a free consultation from Lexington Law.

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