Life Beyond the Financial Pit: Are Credit Repair Companies Worth the Salt?

are credit repair services worth it

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When it comes to recovering from financial pits, U.S. President Donald Trump takes the ultimate prize.

After four different bankruptcy filings, the most recent being in 2009, and selling off major businesses in order to cover the debts and get his credit back in shape, President Trump easily takes the pole position on the most outstanding comebacks from financial pits.

One of the hardest hit your credit score can take is bankruptcy. Recovering from a bad credit score is a tough ordeal and you need a mountain of grit, patience, and resilience.

Read more: How Do Credit Repair Companies Work?

Several Americans are making New Year resolutions to make financial comebacks. And it’s comforting to know that you can get a helping hand on this journey from Credit Repair Companies.

However, are credit repair companies worth their salt? Which is the best credit repair company?

Read on and find out what exactly is a credit repair company; What help you can get from a credit repair company; Why there’s been an outcry of fraud; How to tell a good credit repair company and Why you should hire a credit repair company.

We’ll wind up with a quick check at some of the top-rated credit repair companies in the US today.

What is a Credit Repair Company?

As the term Credit repair suggests, it’s an organization that helps you take a proactive approach to improve your credit score by challenging certain information in your credit report.

Credit repair companies engage in various activities including, but not limited to, contacting credit bureaus and creditors about errors found on a report.

Even though individuals have the opportunity to challenge incorrect information in their individual capacities, many don’t. Many people find the processes and formalities required when dealing with credit reference bureaus and creditors complicated and tedious.

Furthermore, many people can hardly get the time from their busy work schedules to chase after such agencies.

Thus Americans often hire credit repair to deal with the credit bureaus or their creditors.

Credit repair companies charge an average monthly fee that ranges between $80 and $129and clients are usually in it for the long haul.

Fixing a genuine error on a credit report could take more than a month or two. Correcting multiple errors often requires lengthy negotiations and significant documentation which could take a whole lot longer.

Credit repair companies also extend their services to training clients how to manage their credit prudently and help you to sustain a better credit score for longer.

What Assistance Can You Get From A Credit Repair Company?

The simplest form of assistance a credit repair company provides is disputing erroneous or outdated information that is on your credit report. For instance, they can help you update incorrect information about an account balance.

However, the best credit repair companies can go out on a limb and help you solve complicated cases such as instances where there’s identity theft. Such credit repair companies also step in to solve cases that may require more legal and lengthy credit repair procedures such as removal of an IRS tax lien.

What Credit Repair Companies Cannot Do

Credit repair companies provide much-needed help for Americans. However, there are some extreme lengths that they cannot reach. That is unless the company is a fraud.

If a credit repair company promises to erase negative information from your credit report –even though you know that the information is accurate – the company is obviously fraudulent.

If that’s you, don’t be taken in for a ride. Accurate negative entries on your credit report must take their due course and only you can erase that by making payments on time.

Also, if you hire a company that claims that they can purge accurate negative entries, you could be breaking a law or two.

Why There’s Been an Outcry of Fraud

There’s been a resurgence of fraudsters masquerading as credit repair professionals all over the country in the recent past. This is because there are so many Americans having credit problems.

Here’s a tip if you have bad credit, don’t fall for smart pants who claim they can purge accurate information. You can read this article and find out more about what how to fix your credit score.

Just a couple of years ago, one of the most famous “credit repair professional” Keith Lawrence Middlebrook infamously known as the “credit repairman to the stars,” was indicted as a scam artist.

In a report carried out by the San Diego Tribune, Mr. Middlebrook is alleged to have pursued celebrities and other well-off people as clients, swindling them of more than $ 1 million.

He promised to help them get their debts erased and credit scores elevated. However, most of what Mr. Middlebrook claimed he could do was a lie.

It’s not just Mr. Middlebrook who takes advantage of gullible Americans. In total, each year, the FTC receives thousands of reports from Americans allegedly swindled by “credit repair” companies. The FTC has rooted out scam companies which have the audacity of using the acronyms “FTC” in their business names.

With so many scams out there ready to bilk vulnerable Americans, no wonder the Federal Trade Commission says it has never seen a legitimate credit repair company. Instead, they are called credit counseling organizations.

How do Scam Credit Repair Companies Dupe People

You may wonder how the scheme can be so widespread yet it is obvious. Well, one thing the scammers have that’s going for them is that Americans are desperately indebted and want to get out of debt.

Another thing is that scam “credit repair” companies have learned how to take advantage of loopholes created by the bureaucracies and rules of dealing with credit reference bureaus.

One way they do this is through what is known as “bombardment” or “Jamming.” Credit bureaus are compelled by the law to drop any disputed item if they cannot verify it within 30 days.

Therefore, scam companies “bombard” the credit bureaus with disputes concerning a report. They can challenge every item in your credit report knowing that the bureau may be unable to verify everything within the stipulated window.

The bureau is obliged to drop the entries for as long as they cannot verify them.

However, the same law that orders credit bureaus to drop items that cannot be verified gives them a leeway to reinstitute the item once verified. Therefore the relief you got on your credit report doesn’t last long.

As soon as the chaos is over, your credit score will plummet once again.

Others cleverly ask you to scheme using an employer identification number and instead of your Social Security number leading you to commit a felony.

However, most don’t go through these fancy and complicated procedures. They just hook you in, take your cash, send out several unsubstantiated and ineffective letters to the bureaus and your creditors, and disappear with your cash.

How Can You tell a Scam from a Professional Credit Repair Company

Here are some tell-tell signs you should watch out for.

  • Watch out for companies that advertise directly.
  • Watch out for claims that they can quickly fix your bad credit, regardless of how terrible it really is.
  • Stop dealings with companies that ask for upfront payment for credit repair services. It’s illegal.
  • Be uneasy when the credit repair company discourages you from contacting the credit bureaus directly.
  • Lastly, stop dealing with companies that suggest that you apply for an employer identification number and use it instead of your Social Security number when applying for credit, that’s inching closer to fraud. Also, don’t take the advice to dispute all the information in your credit report, even entries you know are true.

How To Tell A Good Credit Repair Company

But there are genuine credit repair companies. These are companies that abide by the Credit Repair Organizations Act (CROA) which was enacted in 1996 to help clean up the industry.

Some of the guidelines set out by the legislation include the following:

Credit repair companies are barred from receiving upfront payments. They are not allowed to make false statements about their services. They must set out a minimum 3 day window period during which clients can opt out of the contract with no costs. And they have to give written contracts which detail the terms of service, costs, the company’s official name, and address.

Nonetheless, adherence to CROA doesn’t mean that you’ll receive great service. If you want to know what the best credit repair company is, here’s what else you can look out for.

  • The company should be ready to offer “a free consultation.” Here, what we mean is that the company should be ready to make a quick review of your credit report, explain to you the options available and tell you what they can deliver and what they cannot.
  • The company should also have been around for some time at the same business address. Companies that have been in the business for at least five years without any FTC indictments are likely to be genuine and chances are high that they’ve handled cases similar to yours.
  • Look for companies that have an attorney on staff. As mentioned, credit repair can sometimes involve lengthy and complex negotiations which frequently require legal expertise.
  • Lastly, check for companies that offer a warranty on their performance. Good credit repair companies are ready to put their money on the line. They state that they won’t charge you if they cannot remove certain disputed items from the credit report.

Why Should You Hire a Credit Repair Company?

Obviously, you want to hire a credit repair company to save your time and for the convenience. Just because you can DIY, it doesn’t mean that you should drop stuff from your daily to-do list so that you can do credit repair. Besides, dedicating your time and energies to credit repair takes these vital resources from more important cash generating ventures.

Also, you should hire a credit repair company because of the expertise. The best credit repair companies make it their business to specialize in credit repair. That means that they know the applicable laws, standard procedures and know how to deal with bureaucracies of credit bureaus and creditors.

Most legit credit bureaus offer more than just credit repair services, they educate you on prudent credit management and some offer other kinds of services such as legal assistance.

Lastly, Here’s a Look at some of the Top-Rated Credit Repair Companies

1. Lexington Law

They are known for their experience after being on the job for decades. Their credit repair services are often not matched by other companies, a fact that’s attested by the several positive reviews from their clients.  Also, they offer a tiered service and charge month on month. So, customers have the choice of going for low-cost options and they can cancel services at the end of the month.

2. Credit Repair

CreditRepair.com is well-known partly because of its “search engine friendly” name and because of the several extras that they offer. CreditRepair.com has a cool user interface that helps clients track progress as they work on your report.

3. The Credit People

The Credit People is a hit amongst Americans because of its gutsy 7-day trial period. During this time, for only $ 19, they offer repair services including fixing errors on your credit report, sending letters of good faith to your lenders and seek out legal loopholes that can help you restore your credit score

4. SkyBlue

SkyBlue has been in business since 1989. Over the years the company has gasped the ropes of the business so well that they have an audacious 90-day, 100 percent cash-back guarantee.  Plus, you can get started at just $ 69 a month and pause the services anytime you feel like.

5. Ovation Credit Repair

Ovation is well-known for their exceptional customer service. Now, that’s not usual for credit repair firms. The company assigns a dedicated professional advisor for each case in addition to the regular essential services. Although onboarding is at $ 89, the charges in subsequent months significantly drop to between $ 49 to $ 69, it pays to hang on with them for the long haul.

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