Enlisting the help of a quality credit repair company may end up being one of the best things you have ever done for your financial future. A good credit score can improve so many aspects of your life from the home you live in to the car you drive to the job you work. But choosing a bad company not only won’t get you any closer to achieving your credit goals, but it could lighten your pocketbook or worsen your credit situation.
Below is a checklist of things to look for when shopping for a credit repair company you can reference to help you separate credit repair the trustworthy companies from those that are better left alone.
Length of time In business
Starting a credit repair business is easy. There are a number of software programs you can purchase that will essentially allow you to create a new company overnight. What these programs don’t provide, however, is expertise.
Your credit score is too important to trust to someone who isn’t an expert at credit repair. As a general rule, you will be better off selecting a company that has been in business for a few years. Not only will they have more experience, but there is a better chance that they will remain in business for years to come.
A company’s BBB profile is a good resource for seeing how long a company has been in business. If a company does not have a BBB profile, they may be too new or unknown.
The Federal Credit Repair Organizations Act states “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”. This provision was put in place to protect consumers from companies that would charge hundreds or even thousands of dollars for services and then either not providing the agreed upon services or not be able to positively affect the customer’s credit report, something that is a possibility no matter how good a company is. Be leery of a company that requires a payment before providing services.
Having a physical location speaks to the company’s stability and intention to provide services on a long-term basis. A company that does not provide a physical address or only has a PO Box is more likely to disappear once they have your money. Also, make sure to plug-in the company’s address in a service such as Google Maps so you can see the actual building. It is not uncommon to find that the address is a personal residence which
At a minimum, a credit repair company should accept credit cards, preferably by processing them themselves instead of using a third-party service such as PayPal. This allows you to take advantage of your credit card company’s fraud protection services if necessary. A company that only accepts cash, checks, or money orders is probably one that you want to avoid.
Breadth of Services
When credit repair companies first started, their services consisted solely of generating credit bureau disputes. This method can be effective in cleaning up a credit report, but it tends to be slower, does not work in all cases, and only addresses the 35% of a person’s credit score that has to do with derogatory listings.
Today, the most successful companies provide additional services such as goodwill letters, direct creditor disputes, debt validation, and credit score coaching. Make sure you find a company that offers the services necessary to help you achieve your credit goals.
Option to Choose Which Items to Dispute
There are two reasons why this is important. First, the Credit Repair Organizations Act forbids companies from making claims that are untrue or misleading which “upon the exercise of reasonable care, should be known by the credit repair organization” such as disputing a negative item you know is accurate. Second, there are times when disputing a negative item is a bad idea such as when it is an older item or represents a legitimate debt that has not been paid. Disputing these items can actually result in a lower credit score.
Too Good To be True Promises
Legally create a new credit report, guaranteed 700 credit score, permanently remove all negative information form a credit report; these are all promises that are too good to be true for a reason. Not only is it impossible for a company to guarantee that they will be able to positively affect your credit score, it is illegal. The same is true of creating and trying to get approved for credit using a new credit report.