If you have negative information
in your credit file, you may want to think twice before
calling a credit repair company to help you. For a fee,
many credit repair companies will claim they can "fix
or clean up" your credit record. Some will even
promote that they can eliminate bankruptcies or liens
from your file forever. In truth, these companies may
end up costing you money-;sometimes putting you in even
worse financial shape than before.
Generally, you can do everything a credit repair company
claims to be able to do, for little or no money. All
that's required of you is a little bit of time, a concentrated
effort, and an action plan to repay debt and get back
on the road to a healthy financial future.
Under the Credit Repair Organizations
Act, credit repair companies must give you a copy of
the "Consumer Credit File Rights Under State and
Federal Law" before you sign a contract. In addition,
they have to supply you with a written contract which
clearly defines your rights and obligations. Under law,
a credit repair organization cannot do any of the following:
- Make false claims about their services;
- Charge you until they have completed
the promised services; or
- Perform any services until they have
your signature on a written contract and have completed
a three-day waiting period. During this time, you
have the right to cancel the contract without paying
any fees.
If you are considering enlisting the help of a credit
repair organization, call the Better Business Bureau in
your area to learn more about the company. Even better,
contact a nonprofit credit counseling service. You'll
find them listed in your local telephone book or you could
check with your bank or a consumer protection office to
see if they have some suggestions.
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