Credit Repair Scam: How to Identify Legitimate Credit Repair Services

A credit score reflects creditworthiness. It is based on the borrowing experience described in official reports. Unfortunately, these assessments are not always accurate. Mistakes in data compiled by TransUnion, Experian, and Equifax cause problems for millions of US citizens. According to the Federal Trade Commission, around a fifth of all scores is unfair. Repair professionals can correct your status on your behalf, but some companies are scams.

The services are rendered across the United States. The industry is regulated by the Credit Repair Organizations Act, and disputes are based on the Fair Credit Reporting Act, which obliges all bureaus to provide accurate data. Consumers should be careful to find trustworthy legal professionals. Follow our tips to make the most of delegated repair.

  1. Reputation and Feedback

The legal requirements for these businesses vary from state to state. An organization must be registered and licensed, and a surety bond must be obtained. You can check the formal status of every company on the website of the Better Business Bureau. 

Check when the company was established and incorporated, where it is headquartered, etc. If any lawsuits have been filed against the firm, visitors are notified. These details may also be found on credit repair sites — for example, check the Credit People review from 2021.

A company does not have to be accredited by a non-profit. Still, BBB ratings are telling, as this entity was created to enhance marketplace trust. It will help you choose a reputable credit repair company in any state. 

Zoom in on the comment section to see complaints registered over the past 3 years and 12 months. You can see how many of the issues have been resolved. Check how your potential provider reacts to criticism.

Finally, websites like TrustPilot and Consumer Affairs will complement this feedback. Negative reviews may be biased, so evaluate them critically. Even the best brands get scathing comments sometimes. What really matters is recurring issues. See if the company delivers on its promises. 

  1.  Do Not Trust the Hype

Unscrupulous providers offer to boost your score quickly and eliminate any negative information. In reality, credit repair takes months (3-6 on average), and no specific outcomes are guaranteed. For example, a qualified expert will never assure you that a certain number of points will be gained. This is not a science.

Many big companies provide a free initial consultation. Take advantage of this opportunity. The team will analyze your case and give a tentative evaluation. They will outline realistic results and possible duration. If the offer seems too good to be true, look elsewhere. 

  1. Any Refunds?

Some popular brands do not have a money-back policy, so it is not a surefire indicator. Still, having an opportunity to get your money back is great. As the results are not guaranteed, you should get a refund if the experts fail to achieve anything.

Typically, the policy will cover the first 60 or 90 days of service. It is voided by a single change to your reports. Conditions may vary, but the current offer from Sky Blue Credit Repair is unparalleled. This provider gives refunds for any reason. 

  1. Examine the Contract

By law, every provider must sign a written contract with a client before rendering any services. Examine the document and remember about the fine print. Cancellation must be possible at any stage, as this is required under The Credit Repair Organizations Act. The contract will not have a fixed duration, and you will be charged based on the billing period — usually, every month.

  1. No Advance Payments

These firms are not allowed to require advance payments. At the same time, the ‘set up fee’ aka ‘first work fee’ is common. It may be required after the agency completes some work for you, which makes it legal. Some companies limit the cost to the monthly fee. Others have a setup fee that is equal to or different from the regular payment.

  1. No Upselling

The majority of firms offer a set of service bundles. Depending on your case, you may need basic, average, or aggressive correction. The core services include the collection of your reports, analysis, preparation of evidence, and formal disputes. The number of challenges per cycle varies. For instance, the cheapest level may include five challenges per bureau per month.

Choose a bundle matching your needs. Premium plans are packed with add-ons that may not be necessary. For example, you may be offered identity theft protection, score monitoring, TransUnion alerts, a special credit line, etc. Remember that repair will take several months. Make sure you will be getting the best bang for your buck. 

If you are being bothered by collection agencies, the team may send cease and desist letters to stop the harassment. They may produce other types of correspondence, such as debt validation letters. Make sure you have a clear description of the contents of each bundle. 

  1. Customer Support

Finally, the quality of assistance is crucial for any business. The biggest brands have unique apps for Android and iOS. Others let you monitor the status of your case 24/7 through their web portal. The team should be reachable by phone every weekday during business hours. Some firms are also available on weekends.

To Conclude

Do not make rash decisions. A scammy firm will only rip you off, leaving the score unchanged. Incompetent employees may cause further damage to your status instead of raising it. These seven factors are crucial — use them all to find a firm that can be trusted.


TBN Editor

Time Business News Editor Team