A national association of responsible credit repair professionals ...

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A guide for consumers ...
Courtesy of the Ethical Credit Repair Alliance

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Did you know that about 1 out of every 3 or 4 Americans suffers from bad credit?

That's about 75 - 100 MILLION people!

There are many responsible credit repair professionals out there, and they provide a much needed service to consumers. Good credit is extremely important to the American way of life.

People with problem credit are prone to many hardships, such as having to pay excessively high interest rates for home and car loans - if they can get a loan at all! Bad credit can even prevent one from getting insurance or landing a job.

Those with bad credit find themselves in a desperate situation indeed! It's probably because of that desperation that those same people are often "easy prey" to less-than-reputable companies ready to scam them out of their hard-earned dollars. And there are, unfortunately, many of them!

Consumers need to exercise due diligence when choosing credit repair professionals.

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Here are 7 Tips to help you when shopping
for responsible credit repair professionals

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1. Does the company have affiliations with a national association of professionals that acts as a regulatory body?

Find out if the company is a member of the Ethical Credit Repair Alliance (ECRA), the Better Business Bureau, or some similar organization. When choosing a service or business of any kind you are many times advised - and rightfully so! - to check with the BBB. But in the case of credit repair professionals, the ECRA is a regulatory agency specific to that profession.

This organization requires all its members to agree to a stringent "Code of Ethics" and to always work in the best interest of their clients. As a result, a member company is likely a safe choice when seeking help.

And as is the case with the BBB, any complaints against member companies are fully investigated. Any open or unresolved disputes against a member are displayed for public viewing on the ECRA public website at www.ECRAOnline.org.

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2. Are you shown a contract? And is it complete?

Federal Law mandates that the organizations who repair credit provide a written contract. Make sure they do so, and also make sure all the details are spelled out, including the services that will be performed, the fees that will be charged, and when those fees become due. In addition you have three days, by law, to cancel that contract.

The agency should give you a written copy of the "Consumer Credit File Rights Under State and Federal Law" that stipulates your rights, including:

• The right to dispute inaccurate information in your credit report by contacting the credit bureau directly
• The right to obtain a copy of your credit report from a credit bureau
• The right to sue a company that violates the Credit Repair Organization Act
• The right to cancel your contract with credit repair companies for any reason within 3 business days from the date you signed it

If you are not offered a written contract, and if that contract does not spell out in detail what the fees and services will be, look for another company.

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3. Does the company guarantee results?

Wouldn't it be nice if what we most want to believe were always synonymous with what is true? But in the real world, things just don't work that way.

In the credit repair business results can never be guaranteed! A company can guarantee their best effort -- they can guarantee they will act in your best interest -- they can guarantee to refund your money if you are not satisfied.

But results? Never!

No matter how desperate you may be for relief from your bad credit, and no matter how much you want to hear guarantees that your credit score will improve, and that your credit will be "cleaned up" in a short time, if a credit repair professional guarantees results, forget about him!

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4. Does the company ask for full payment up-front?

By Federal Law, a credit repair professional may not charge for services until those services have been rendered. If a company asks for full payment up front, this should raise a "red flag."

Some companies will charge a nominal up front fee (for an initial consultation and/or credit report analysis) and monthly fees thereafter, as they continue the ongoing process of following up with the credit bureaus. If this is the case, the initial fee should be commensurate with the initial service.

But if a company asks for full payment up front, it's most likely because they cannot - or will not - deliver on their promises. And they know full well, that you're not about to pay, once that becomes obvious!

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5. Does the company advise you to get a "New Identity"?

This is called "File segregation" - and it's most definitely illegal!

The idea is to get an Employer Identification Number (EIN) and create a new identity using that number in place of your Social Security number. Next, you use that new identity to get a new credit report.

Don't even THINK about doing it! And don't waste another minute of your time on any company that suggests you do.

Any credit repair companies that offer this "solution" are fraudulent.

6. Does the credit repair company promise quick results?

Repairing credit takes time. It took many years to form your credit history, and it just isn't realistic to expect that any agency can cause you to have exemplary credit in just a few short weeks.

Nevertheless, it is possible ... and I emphasize "possible" ... for there to be major improvement in your credit score in a little over a month. But more likely it will take from 4 - 8 months, sometimes a year, and sometimes longer.

And don't forget: negative accounts that are verified by the credit bureaus can remain on your credit report for 7 years: bankruptcies for 10.

The point? If a credit repair company wants you to believe they can completely clean up your credit in a few days, or even a few weeks, do not trust that company.

7. Take Action to Protect Yourself!

• Ignore unsolicited offers you get by email
  
  Responsible credit repair professionals do not send email solicitations. These emails are sent by dishonest agencies who "harvest" email addresses on the Internet, then try to ensnare desperate individuals by promising to make their credit problems disappear overnight.
  
  Don't be fooled! Responsible credit repair professionals will only make offers by email if you have previously requested them.
  
  
• Learn some basics about credit repair before you begin your search
  
  Most of those people who are cheated by "credit repair professionals" had no prior knowledge of just what credit repair is, how it works, what results they can expect, and what they should not.
  
  Without that knowledge, the consumer has no idea if a company's promises are realistic, or if their tactics are even legal!
  
  Before seeking help, you should educate yourself about credit repair. The "education" need not be extensive, but some basic knowledge is vital: for instance, which credit repair tactics are legal, and which are illegal. Only when you know clearly this difference, will you be able to decide which credit repair professionals are trustworthy and which are not.
  
  For example, no one can remove derogatory accounts on your credit report if those accounts are verified by the credit bureau(s). There are a great many companies who claim they can completely clean your credit report of all derogatory items, and do so in a very short time.
  
  Anyone knowledgeable about the basics of credit repair will realize these claims are bogus.
  
  
• Get a copy of "The Danger Signs to Look for In a Credit Repair Company"
  
  The Ethical Credit Repair Alliance will send you a free report and a free newsletter with valuable information on managing your finances, saving money, and money matters in general.