With the major global economy recession closing in, most banks are making it harder for consumers to qualify for loans. At such time, your credit score and records gain tremendous importance. In order to be eligible for any credit, your records should be as close to impeccable as possible. Are they?
Be warned, though that this is the time when fraudulent credit repair companies prey upon the vulnerable consumers and fleece them of their hard earned money without adding any value to their credit score. There is enough advice that teaches you how to avoid fraudulent credit repair companies, yet every year millions are cheated. How?
The answer, put simply is lack of awareness. People who are worried about debt swallowing their lives rarely give themselves time to gather enough intelligence on the topic. The result is that they part with their hard-earned money and gain nothing but heartache.
Be smart, not victim. Learn to protect yourself against such unscrupulous "business" establishments.
1.Cover the bases – be aware that all credit repair agencies are required by CROA (Credit repair Organizations Act) and FTC (Fair Trade Act) to provide you with a copy of your rights as a consumer. This is a simple one-page document that explains what your rights are when you want to repair your credit by disputing inaccurate entries and information found in your credit report. A very important point that every consumer should know is that you have the right to cancel the contract entered with a credit repair agency within three days from signing it, in case you find that anything has been misrepresented to you.
2.Payment matters – remember you went to this credit repair company for the exact reason that you do not have money. Therefore, you need not pay anything upfront. Ensure that you have some results before you loosen your purse strings; and the results are obtained through legal means. According to CROA (Credit Repair Organizations Act) you need to pay the fees only after the credit repair company delivers what they promised.
3.Financial management counseling – any credit repair company that does not offer financial counseling is not worth its salt. The root cause for the situation you are finding yourself in today is poor money management. While credit repair is emergency treatment, the cure lies in learning how to manage your money better in the future.
4.Do not accept their word for it – reputation is the scent that spreads from the past performances of a person or organization. Find out whether the credentials given to you by the credit repair agent/ agencies are accurate by checking with the Ethical Credit Repair Alliance (http://www.ecraonline.org)
5.Stay within the legal frame – do not accept "wiping off bad entries", "piggy backing" or other such nefarious ways to improve your credit. For every illegal way, there are four legal ways to improve your score. Accept only the legal way and ensure not only a better credit score, but also peace of mind, as you would never have to worry about "being caught" as this is a Federal offence.
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