Credit repair is not only legal it is a recommended practice by many credit counseling organizations. The bad press coverage, which is often directed to credit agencies, is the direct outcome of the unethical behavior of fraudulent credit repair companies. This is why it is imperative that you, as an intelligent and aware-of-his-or-her-rights consumer, research well and understand how to weed out such companies. Check out the CROA (Credit Repair Organizations Act) at http://www.ftc.gov/os/statutes/croa/croa.shtm as the base for your research.
Awareness is the only tool that can help you protect yourself against fraud. Here are a few points that would help you differentiate between the genuine and fraud credit repair organizations:
1.Credit Bureaus are accessible to everybody – legitimate credit repair companies would gladly teach and encourage you to get in touch with the Credit Bureaus. Be careful of any such organization that deters you from doing.
2.Reputation with the ECRA – check with http://www.ecraonline.org for the records of the company you are planning to use. Is the company a member in good standing?
3.Check with the Courts – use the Internet to look up whether your favorite company or credit repair agent has any complaints of fraud or legal action registered against them. You could also visit the court and with the help of the clerical staff, find out whether there are any past or present cases registered against the company/ agent.
4.Check for criminal background – sometimes, the past of your advisor could be a warning sign by itself. Run a check to find out whether there is any criminal activity listed in the past of your credit repair agent or company.
5.Doing your own credit repair - The best reason to go to a legitimate credit repair agency is that they have much more experience in what and how to do it. They are aware of the little tricks that could make your letters to the Credit Bureaus most effective; they know the best time to write such letters and they know how to pursue the matter. In other words, you engage these people to do this work because it would mean you have your hands free for something else. It is just like hiring a driver; it is not that you cannot drive, but having one give you time to do other things.
Otherwise, it is true that whatever they do for a fee, you can do for yourself free. Many people use a credit repair company not so much for their invaluable services of repairing their credit, but because they want someone to guide them to manage their money better.
Source: http://www.nbc-2.com/articles/readarticle.asp?articleid=21889&z=3
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