This is a development despite the fact that under the new bankruptcy laws as of 17 October 2005 the consumer who wishes to declare bankruptcy would have to undergo credit counseling by a Government recognized institution (list of Government approved organizations can be found at http://ww.usdoj.gov/ust) for a minimum of six months.

This is definitely disturbing news for everyone. It also shows that credit repair has never been as important as in the present. At the same time the bad press coverage that credit repair agencies have attracted over the years has made people hesitant about using such services, leaving them open to despair and financial ruin.

For a long time, there were debates and deliberations on how to ensure that the legitimate credit repair agencies be differentiated from the fraudulent ones. The Experian, one of the Credit Bureau companies that keep your credit score, has actively worked towards this goal since 1999 when they in partnership with FLA (Finance and Leasing Association) set out to increase awareness among the common people regarding their right and the dangers of false claims made by fraud credit repair agencies.

As a result, UK has amended the Consumer Credit Act 2006 and with in effect from 1 October 2008 all credit repair agencies would require to be issued a consumer credit license from the Officer of Fair Trading (OFT). To be eligible for the license the credit repair agency would have to pass a series of competency tests as prescribed by the OFT.

This is an outcome that has been pursued in the USA as well, and the success story in UK would definitely act as a case in point to help vulnerable US consumers as well.

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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