The Truth behind Credit Repair Services

With high unemployment, underwater mortgages, and high debt levels, Americans have faced tough economic times in the past several years. Companies have preyed on vulnerable consumers, offering credit repair and mortgage relief services that promise more than they deliver. Last year, the Federal Trade Commission accused eight companies of falsely telling consumers that the companies would remove negative information from credit reports or get their banks to modify their mortgages. The companies charged consumers up to $2,000 each for their alleged services.

All but one of the companies failed to respond to the complaint. A federal court ruled against them by default and ordered that they pay more than $7.5 million for their deception. The court order prohibits the companies from selling so-called credit repair services and offering to handle late payments, charge-offs, collections, delinquencies, and other problems that consumers face. The court order also bars the companies from misleading consumers about what they do, as well as their affiliations with the government. If you would like more information about legitimate ways to go about repairing your credit history and financial life, an experienced Washington DC or Maryland bankruptcy attorney can help you separate fact from fiction.

Credit Repair Services Revealed

  • Learn what companies can and cannot do. They have no say in removing bankruptcies or bad loans from your credit report. They cannot issue you a new social security number and help you start a brand new financial life. These companies are scams and they will swindle you out of your hard-earned money. If negative information about you is accurate, no one can make this simply disappear. The old adage of “if it’s too good to be true, it probably is” rings true for credit repair services.
  • No payment before services. The Credit Repair Organizations Act prohibits legitimate credit repair companies from receiving money from you before they have provided you services.
  • Be wary of quick fixes. It takes years of responsible, consistent financial behavior to improve your credit reports and scores. Do not trust any companies offering a quick fix to your bankruptcy or financial problems.
  • There are things you can do yourself free. If there is a genuine error with your credit report, you can fix that yourself for free by dealing directly with the credit agency. You can also add explanations to your credit report to detail reasons why you slipped up once or twice. For disputed errors, there are legitimate, for-profit credit repair companies that can handle disputes on your behalf by filing out the necessary paper work and following up with the credit agency.

Avoid credit repair scams by taking responsibility for your own financial history. Right now things may seem dire, but, by budgeting and following a plan, the months will add up and your credit history and scores will significantly improve. Contact a Boston or Washington DC bankruptcy lawyer at the law firm of Kevin D. Judd for more information about your financial options.

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