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Credit Repair Companies

Credit Repair Companies
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

The Credit Repair Organizations Act (CROA) is a federal law which governs how credit repair companies may do business, and prohibits certain practices. Congress passed this law with the understanding that consumers who have had credit problems may look for help from credit repair agencies which offer to improve their credit standing. Understanding what a credit repair organization may legally do for you will help you weed out those companies who make promises they can’t keep, and who will disappear with your hard earned cash.

Policies governing Credit Repair Companies
There are federal and state laws to monitor the services of credit repair companies so that they do not manipulate their services. According to the California law, a credit service company has to attain a $100,000 bond and keep the asset as long as they are in business and two years after they get out of

the same. Besides, they need to register themselves with the Department of Justice and obtain a registration certificate that should be made available to the clients if asked for. A credit repair company cannot accept payment unless they have completed the services that they had promised and these services must be completed within 6 months. They must also advise you of your rights under the Fair Credit Reporting Act and furnish you with a written contract specifying all the services that need to be performed and also allowing you to cancel the contract without any penalty within 5 business days.

The steps you need to take before you use the services of a credit repair company.
Before entering into business with a credit repair company, ensure that you undertake the following steps:
• Get in touch with the Better Business Bureau and get a reliability report of the company.
• Check the company’s registration certificate issued by the Department of Justice. This will help you to know about any litigation or other complaints filed with any governmental authority of California or any other state the federal government and how they were sorted out.
• Ascertain and clarify what all the company will do or not do. If you carry a copy of your credit report, you can tell them what are the changes or modifications that you are looking for. However, all these promises need to be given in writing; so ensure that you get them.
• No negative information can be altered or erased from your credit report. So, if any company makes such promises, remember that it is not true.
Beware of such companies that engage in the practices discussed below:
• Asking for payment before rendering the services.
• Not explaining to you about your rights and the changes you can do for yourself.
• Suggesting that you should contact a credit bureau directly.
• Recommending illegal practices like creating a completely new identity; remember, if you are taking such advises, you are committing a crime and may be face legal action. 

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