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4 Tips for Identifying a Legitimate Credit Repair Provider
- By Stuart Hunter
- Published 11/19/2009
- Finance Articles
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Stuart Hunter
Providing credit repair services since 1991, Lexington Law has helped over 500,000 clients legally take on their credit. Last year alone, Lexington Law helped clients remove over 600,000 negative items from their credit reports.
View all articles by Stuart Hunter
The Federal Trade Commission is charged with the enforcement of consumer protection law and is responsible for shielding you and me against unscrupulous companies that unfairly garner our business through false claims and, quite simply, by breaking the law. With regards to credit repair scams, practices like these became so common that Congress passed a federal law to outline how credit repair companies can operate. The Credit Repair Organization Act (CROA) was passed to protect consumers and provide them with recourse if they are a victim of a dishonest credit repair company.
When researching credit repair companies, there are some glaring red flags that should alert you to stay clear. According to the Federal Trade Commission, avoid services that:
Request Payment in Advance - Credit repair companies shouldn't require payment they have worked on your case. Under the CROA, these credit repair companies cannot require payment until they have completed the services promised.
Do Not Disclose Your Rights - Legitimate
com">credit repair firms will inform you that you can order one free copy of your credit reports every 12 months from the credit reporting agencies, and that you can dispute inaccurate or questionable items on your own , free of charge. If a company does not alert you to this information, specifically in the form of a CROA required disclosure titled "Consumer Credit File Rights Under State and Federal Law", take your business elsewhere.When researching credit repair companies, there are some glaring red flags that should alert you to stay clear. According to the Federal Trade Commission, avoid services that:
Request Payment in Advance - Credit repair companies shouldn't require payment they have worked on your case. Under the CROA, these credit repair companies cannot require payment until they have completed the services promised.
Do Not Disclose Your Rights - Legitimate
Endorse Using a New Identity - Some shady credit repair companies will go so far as to advise you to create a new credit identity by using an Employer Identification Number (EIN) in place of your Social Security number on credit applications. This is a serious crime and if anyone suggests this as an option, run the other way.
Misrepresent the Services They Can Provide - Beware of credit repair providers that guarantee to remove negative and accurate items, such as liens and foreclosures, from your credit file. No one can guarantee that items will be removed, especially if the items are true.
Article Series
This article is part 3 of a 3 part series. Other articles in this series are shown below:
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4 Tips for Identifying a Legitimate Credit Repair Provider
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