LEGAL CREDIT REPAIR

The Credit Repair Organization Act

The Credit Repair Organizations Act (CROA) is a federal law passed in 1996 that requires companies offering credit repair services to advertise and communicate honestly with consumers. Additionally, CROA is part of a more extensive set of laws called the Consumer Credit Protection Act (A/K/A The Truth In Lending Act). Hence, the CROA is meant to protect consumers from companies that charge them money and falsely promise to remove negative items from their credit reports or dramatically improve their low credit scores.

In summary, enforced by The Federal Trade Commission (FTC), the Credit Repair Organizations Act was put in place to protect consumers from unscrupulous practices by organizations that claim to repair credit.

BUYER BEWARE

Recognizing a Credit Repair Scam

The FTC urges caution when choosing a credit repair firm, stressing the following:

1. Beware of Companies that Don’t Give You a Contract

Credit repair organizations must give you a copy of the Consumer Credit File Rights Under State and Federal Law before you sign a contract. They also must provide you with a written agreement that spells out the terms and conditions of payment and describes in-depth the services to be provided, including any guarantees of performance. Your rights and obligations should also be disclosed.

2. Beware of Companies That Guarantee Results

Credit repair No credit repair company is so good that it can guarantee a specific outcome. Guarantees are a sure sign of credit repair fraud.

3. Beware of Companies That Charge Fees In Advance

The company wants you to pay for credit repair services before they provide any assistance.

Under the Credit Repair Organizations Act, credit repair companies can only require you to pay once they have completed the promised service.

4. Beware When Your Rights Aren’t Disclosed

Beware of credit repair companies that do not disclose your legal rights and what you can do for free.

5. Beware Of Companies That Imply FTC Endorsement

The Federal Trade Commission does not endorse any business, period.

6. Beware Of Companies That Imply CDIA Endorsement

The Consumer Data Industry Association (CDIA) does not provide certificates to or certify credit repair organizations.

7. Beware Of Companies Recommend Altering  Your Identity

The company suggests that you try to invent a “new” credit identity – and then a new credit report by applying for an Employer Identification Number to use instead of your Social Security number.

8. Beware Of Companies That Sell Artificial Tradelines

– This is a BIGGIE, and our blog Posts will be attached here shortly –

9. Beware Of a Company If They Ask You to Waive Your Rights

A credit repair company can not ask you to sign any form waiving your rights under the CORA.

10. Beware of Companies That Don’t Allow You to Cancel At Anytime

Do Not trust any credit repair company that does not allow you to cancel service when you want. The Credit Repair Organization Act prohibits this.