Credit repair companies have gotten a bum rap from just about everyone from Congress to states attorneys general to Yelp. The industry has received these black eyes from some bad apples in the bunch, no doubt. Unfortunately, these few had actors have given the entire industry a bad name. I am here to tell you that there are a lot of good and reputable credit repair companies. In this article, I am going to give you some key indicators to look for before hiring a credit repair company.
My Disclaimer – My law firm fixes ERRORS AND MISTAKES only that appear on credit reports. We are not a traditional credit repair company which addresses not only errors and mistakes, but may address other issues on credit reports. We act as the “muscle” for many credit repair companies. When they cannot get an error or mistake removed from someone’s credit the nice way, we take over the matter and sue the credit reporting agency and the lender who put that erroneous information on credit report.
Here are things to look for before hiring a credit repair company:
- Reputation – Start with Yelp and Google. Does the company you’re considering have any stars or recommendations? What are people saying about them? I like to see at least 10 reviews and most of those positive. You also note that in 2015, the Consumer Financial Protection Bureau has posted a website of all complaints that it has received against companies and the outcome of those complaints. It’s certainly worth checking out.
- The contract – Credit Repair Organizations are governed by the Fair Credit Reporting Act (“FCRA”). By law, they have to present you with a written contract that explains your rights under the law. You have the right to terminate the contract within 3 days of signing it. They also are not allowed to charge you fees prior to performing work for you. If you are not presented with a written contract, you should walk away. If you are, then take a few moments and read quietly to yourself.
- Types of fee arrangements – Some credit repair companies have a “Pay for Removal” program and others simply charge a stated monthly fee. In a Pay for Removal situation, the company charges a fee for every negative item that it gets removed from your credit report. The problem with this arrangement is that many times, a negative item may be removed due to the company’s efforts, but in a month or two, may reappear on your credit report. This happens for a variety of reasons. The question you need to ask is whether the company will remove the item again and if it cannot remove it, will it refund your money. Under the monthly fee type of agreement, you should ask, up front, how many months you can expect to be in their program and how much it will cost. Anyone that quotes you longer than six months, may be taking you for a ride.
- Firm Affiliations – This is where my firm comes in. You should ask the credit repair company what their next move is if they cannot get an error or mistake removed from your credit report. If they have no affiliation with a law firm to handle that, then they are in business to take your money instead of giving you service. I have dealt with a credit repair company in New Jersey and one in New York that would only affiliate with my firm if we paid them a kickback. My firm does not pay kickbacks. It’s not only unethical, but is downright sleazy. Hence, these credit repair companies are only interested in helping themselves instead of their clients. Most credit repair attorneys provide their services for free as they charge the credit reporting agency and lender. The law allows for such fee shifting to the bad guys.
- References – Always ask for references. Some companies will balk at the suggestion citing their client’s privacy. Ask for references from the attorneys that they work with who can vouch for them. Again, this relates to the Affiliations point made above, but it’s really important that you hear a third party’s opinion of how the company operates. I work with several credit repair companies and would vouch for any of them because the ones that I would not vouch for are ones with which I would work.
If you have items on your credit report that are in error, please call me, Attorney Gary Nitzkin for a free consultation at (248) 353-2882. You can also email me at [email protected]. If we can help you, we will not charge you any fees or costs as we will collect these from credit reporting agency and the lender that is reporting the bad information. Call us today.