Warning Signs When Considering a Credit Repair Specialist

 

More often than not, credit repair companies seek to recover your credit rating by taking the easy measures first. That is why it is important to know when things can be risky especially if you are seeking the help of a credit repair specialist.

 

Be alert when:

 

1. Credit repair specialists contend that they can make your credit problems go away.

 

Choosing a credit repair specialist that swears to eliminate all of your credit problems can be very risky. Most of them are unscrupulous and could be more of a problem than service.

 

2. Credit repair specialist attempts to erase a bad track record.

 

Those who say they can change your bad credit history are unscrupulous. These claims are very deceptive. Things like bankruptcy cases stay in your credit record for 10 years. It's the way things are and there is no way to erase it.

 

3. A credit repair specialist offers to change or create a new credit identity to get rid of the bad one.

 

Changing your credit identity is illegal. Consequently, the U.S. Federal Trade Commission asserts that activities like file segregation is punishable by law. File segregation is when you create a new, more desirable credit identity to be able to obtain more favorable credit.

 

4. Credit repair specialist wants money down first.

 

If this is the case, chances are you're talking to the wrong person. When considering credit repair services, refer to the Credit Repair Organizations Act that contains several provisions regarding consumer protection to those who seek the services of a credit repair specialist. The provisions in this act provide that the credit repair specialist has to finish the services first before you have to pay for it.

 

5. Credit repair firms immediately urge you to sign up for a debt management plan.

 

Be wary of a company that pushes you to take immediate action. A good credit repair specialist should take an interest in your particular issue and not throw you to some risky plans right away.

 

6. Credit repair specialist charges hefty fees.

 

Often, credit repair specialists will advise you to stop making payments to your creditors and to remit money to them instead. They deposit it in an account and let it stay for 3-6 months. After which, they will offer some compromises to your creditors. The longer you fail to pay off your debts to your creditor, the higher the probability of getting into even more trouble. A credit repair specialist charges you high fees regarding this matter but does not actually settle your debts.