How to Evaluate Credit Repair Companies

At some point in everyone’s life, he or she will be faced with a financial hardship. Whether it is an unexpected hospital bill, an extended period of unemployment, or the need for a new vehicle, things happen for which people are simply financially unprepared. In those moments, they may lean on credit cards and other forms of loans that eventually overwhelm them, and then they face the added burden of credit problems. Worst of all, these credit problems can then make the next financial hardship they face even MORE devastating, thereby perpetuating a vicious cycle of debt and frustration. If you get into this situation, you might think ‘how can I repair my credit?’

Well, the Federal Trade Commission (FTC) and the Credit Repair Organizations Act (CROA) make it very clear – all Americans have the right to not only request a credit report and challenge what they find on it, but all Americans also have the ability to repair their credit on their own. But, as most people know, it is one thing to know that they could change the oil in their car or do their own taxes, but it is another thing to actually do those things on their own. If they trust experts like their mechanic to change their oil and their tax accountant to file their taxes, why shouldn’t they trust credit repair Kansas City credit experts to fix their credit?

Most people would probably see the wisdom in this advice, but the next question inevitably would be – are all credit repair companies the same? And the answer to that question is no. So which aspects of a credit repair company are critical to investigate before someone chooses one to use?

First, consumers should go with a company that they can trust and one that is looking out for their best interest, rather than how fast they can make a buck off their credit problems. A great first sign is the offer of a free consultation, as it shows that they are willing to discuss the consumer’s problems with them first before they see a dime of their money. In addition, that consultation should involve a discussion around potential options rather than the company’s sales pitch.

Check out the Better Business Bureau and see if the company has ever been shut down by the FTC for violations. If so, steer clear! Also, how long they have been in business and what former customers say about them can speak volumes, so any potential consumer should do their due diligence.

The savvy consumer will also learn more about the staff at the company and determine whether or not they have a legal team whose job it is to stay compliant with local and federal laws surrounding your credit. A company that does not have such a team is liable to bend or break the law to ensure a positive outcome for their customers, which can be great in the short term and a nightmare in the long term.

However, when it comes to picking a credit repair company, it can be just as useful to know what to look out for as well. The old adage, ‘sounds too good to be true’ is very applicable here, because the less reputable companies out there will promise quick fixes and easy repairs, but the reality is that credit repair can sometimes take several months. So though the thought of a “quick fix” is enticing, beware of the dangers involved in such a promise.

A company that requires an upfront payment before they say word one is a big problem because it is clear that company is only interested in profit, not in assisting anyone with clearing up their credit report. Worse yet, the practice of requiring upfront payments was made illegal by CROA, so immediately engaging in this kind of activity should be a gigantic red flag.

Any company that states that a contract is not necessary is also one to steer clear of, and certainly any company that insinuates that lying to remove negative items off of your credit report is the way to go is not only to be avoided, but should also be reported to the proper authorities.

There are many legitimate credit repair companies out there, but it only takes one rotten one to ruin the reputation for the entire industry. Credit repair companies serve a vital function in our economy today, where so much of our finances involve the use of credit in one form or another. While there are many companies out there from which to choose, the way they run their company and the way they treat the consumer should be first and foremost in deciding which to go with.


Categories: Credit

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November 1, 2018 How to Evaluate Credit Repair Companies