There’s likely no industry in the world that doesn’t have at least a few bad apples and the same thing happing with credit repair companies. Let’s discuss how to identify a scam.
Consumers have a lot of misconceptions about the credit repair industry, and the assumption that all credit repair companies are scams is one of the biggest ones.
A lot of consumers consider credit repair companies’ business practices to be borderline illegal or shady. It’s easy to understand why consumers think this, though.
Credit repair is a highly sensitive industry, and not everyone is in it for the right reasons. So, what can you do about that as a consumer? Follow these tips to identify a scam credit repair company right away.
1. Doesn’t Do Its Due Diligence
All credit repair companies are required to abide by certain regulations as per the CROA. By law, the company must provide a detailed contract describing all terms and agreements of the services.
If your company doesn’t explain your CROA-administered rights or its own business practices to you, that’s a red flag. A scam credit repair company will often deliberately refuse to do its due diligence.
2. Asks You To Pay Upfront
Credit repair isn’t a process that yields instant results. Instead, it’ll take time for you to see the results and measure the progress.
That’s why legitimate credit repair companies will only have you sign a contract initially and request payment after the completion of services. A scam company will pressure you to pay upfront as soon as you sign the contract.
3. Advice You Against Contacting Bureaus Directly
4. Advises You To Mislead Credit Bureaus
The removal of negative items is often the most appealing service for customers. However, some negative items on your report will be accurate.
Your credit repair agent should not offer to remove such items from your report. They should also not encourage you to falsify information for disputes, identification, and/or applications.
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