You are likely to feel helpless with your finances if you have a bad credit score. Lenders are approving your loans only when you agree to pay a high-interest rate. And, you are not comfortable with the terms of most of the loans or credit cards you are getting.
In a nutshell, you are not in a good financial situation. People like you need to work with companies offering credit repair services. They know that you have to increase your credit score to get a loan with a low-interest rates and terms you are comfortable with. This is the reason why it is an industry. And, for the same reason, the credit repair industry is stigmatized with scams. Anyone with a bad credit score wants to work with one of the best credit repair companies. However, how to know if you are working with a company genuinely offering the best credit repair services?
One thing you don't want is losing money to a scammer. You might come across a company offering free credit repair advice or service. Some companies promise to get your credit back on track by saying that they will remove the negative information from your credit report.
This is not possible.
No one can replace negative information on your credit report with positive information. However, there are many companies in the credit repair industry claiming to do so and people are falling victim to these companies.
Your desperate need for a better credit makes you vulnerable to these scams. Your awareness is the only thing that can save you from scams. The best credit repair companies always follow the Credit Repair Organization Act. This law has made it mandatory for credit repair companies to fulfill some obligations to their clients. If the credit repair company is not following the rules, it is a scammer.
You can look for the following seven signs to make sure that you are not working with a scammer:
The scammer will not provide you with a copy of the Consumer Credit File Rights Under State and Federal Law. So, you will have no ideas of your credit repair rights.
You will not be provided with a copy of the agreement before being asked to sign. Don't sign without reading the contract. Be aware of the information in the agreement.
You will not find the following information in the contract:
The amount to be charged
Date and details of the services to be performed.
The time period during which the services will be performed.
Name and office address of the credit repair company.
A statement to let you know that you have the right to cancel the contract within 3 days after signing.
The scammer will ask you to pay in advance, which is illegal.
He will promise to remove the information that is affecting your score negatively, which is not possible.
He will promise that you will be able to start with a new legal identity.
The scammer will also ask you to fill out a form to waive your credit rights under the CROA.
Always report a scammer to the FTC (Federal Trade Commission) to keep the credit repair industry safe and clean.