You probably already know just how important your credit score is, and how this three-digit manifestation of your credit health can affect your life. Without a solid credit score, you may struggle to get your own apartment, buy a home, or finance a car, for example — and that’s just the beginning.
If your credit has been damaged due to late payments, debts in collections, or neglect, credit repair may be exactly what you need. You can do the repair work yourself, or you can choose to hire a firm to help. A good credit repair company can work as your advocate, providing you with counsel regarding your credit score and how it’s determined. They also work to improve your credit score on your behalf, usually by negotiating with creditors and credit bureaus to remove negative marks, resolve issues and help you repair your credit — once and for all.
Unfortunately, there are numerous credit repair scams to be aware of. Some credit repair companies will ask for money upfront before they have done any work to help repair your credit, for example, while others will ask you to take unethical steps, such as disputing information on your credit report that’s actually true. Another scam to be aware of is any time a company promises you a “new credit identity” or asks you to give false information.
Fortunately, credit repair companies are governed by the Credit Repair Organization Act (CROA). This law requires credit repair companies to take certain steps such as informing you of your legal rights, giving you three full days to cancel your contract with them and letting you know the full costs of their services upfront. The law also gives you options if a credit repair company doesn’t live up to their promises, including the ability to sue them in federal court, the ability to seek punitive damages, and the right to join a class action lawsuit against the company.
If you’re ready to repair your credit, a credit repair agency can help provided they are reputable. Keep reading to learn more about how these companies work and what to expect.