Credit repair companies have been getting a bad rap from everyone. However, you should know that not all of them are unscrupulous. There are many good companies; you just need to know where to look. Here are some things to look for when hiring a credit repair company:
Credit Repair Company Reputation
When looking up the reputation of a certain credit repair company, you should start from Yelp and Google. Look for any stars and recommendations that your prospective company might have. What are people saying about that company?
If you see at least ten positive reviews, you should opt for that company. In 2015, the CFPB (Consumer Financial Protection Bureau) put up a website with all the complaints it received against certain credit repair companies as well as the outcome of those complaints.
Fee Arrangement Types
Some credit repair companies have a program known as ‘pay for removal’ while others just charge a simple fee at the end of each month. In the former case, the repair company will charge a fee whenever it removes any negative item from your report. This arrangement can be problematic because, in some cases, the negative item could reappear in a few months.
This might happen due to several reasons. Therefore, you need to ask yourself whether you will get your money back when it does. Under the monthly fee arrangement, you should ask how long the program will take and how much you should expect to pay for it. If the company quotes longer than 6 months, someone could be taking you for a ride.
The Contract
By law, a credit repair company has to give you a written contract that explains what your rights are. Within three days of signing the contract, you have the right to terminate it. Moreover, they are not allowed to charge any upfront fees for working.
If the company does not give you a written contract, you need to look for another alternative. If you are given the contract, you should take a few moments to read it before signing anything.
References
You should always ask the credit repair company for references. If the company balks at your request and cites its clients’ privacy, you should seek references from attorneys that they have worked with before. Can those attorneys vouch for the repair company?
It is important to have a third party’s opinion about how the company you are considering operates. Lawyers can give biased opinions, which is why you need real references from the company. If it refuses to give them to you, just consider looking elsewhere.
Credit Repair Company Affiliations
If they cannot remove an error from your credit report, you need to ask the repair company what their next move will be. If they do not have any affiliations with law firms, then you should not give them any money. Some companies only agree to affiliate with law firms if they are given a kickback.
Not only is this unethical, but it also says a lot about the company. Such a repair company is only interested in helping itself, not you. A credit repair lawyer will give you advice for free and charge the lender and repair company.
If you have items in your credit report that you would like to correct, you should check a list of reviews for credit repair companies. Before you hire a company, you should talk to an attorney who knows how to deal with credit issues. If the lawyer can be of help, he will collect money from your lender and credit-reporting agency.
