Credit Repair Services and Information
Rules governing credit repair organizations and companies
About Credit Repair Companies
Important Questions to ask Credit Repair Companies
Rules governing Credit Repair Companies
The Credit Repair Organizations Act
This act spells out the obligations that credit
repair companies have when providing services to consumers. There are many
rules that these companies are obliged to follow, and they are designed to protect
the consumer from credit repair scams and unreasonable offers. Some important
details regarding consumer credit rights are outlined below.
Credit repair companies are legally required to:
1) provide a copy of
the "Consumer Credit File Rights Under State and Federal Law" prior to an individual
signing any contract with them.
2) provide a written contract
that clearly spells out your rights and obligations.
Read these documents
carefully and understand their contents fully before signing the contract.
As well, credit repair companies cannot:
1) make false
claims about their abilities, qualifications or services
2) charge
a consumer any fees until the services have been completed
3) provide
their services until after an individual has signed their written contract
4)
complete any services until after the three day waiting period AFTER
the signing of the written contract has expired
Any contract an individual signs with a credit repair company must include:
1) all payment terms, including a total cost for all services
2)
expected length of time that will be required to achieve results
3)
concise description of the services to be given
4) any and all
guarantees they offer
5) the credit repair company's name
6)
the credit repair company's address
Many
states have additional legal obligations for credit repair companies. Contact
your state's consumer credit affairs office or State Attorney General for additional
information. Those companies that provide free online credit evaluations
or no-obligation credit consults by telephone are often a great starting point
to assess the credit repair company you're choosing.
The Federal Trade Commission offers extensive information and warnings about
credit repair companies. The Consumer Action group offers an alerts page about potential credit repair scams.
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