Credit Repair by BestCredit™

Third party credit repair companies have rules which they must follow.

Credit repair organizations perform the credit repair themselves (if you’re lucky) and will most often charge you a monthly fee for this serv­ice.

Credit consultants, on the other hand, will perform an analysis of your situation, make recommendations on ways you can fix it yourself, and often walk you through a workable debt consolidation scenario.

With consultants, you get to see firsthand how much work is being per­formed on your behalf, and you get personalized attention. But with credit repair organizations, there’s no way to know exactly what efforts are being made, if any. And although some may guarantee results, the fine print can be very complicated. For example, some will say they’ll return fees paid after a year of service, by multiplying the number of deletions by a figure of $50 each, for example, and then returning the difference between that number and the total amount paid. But the problem with this is that there are often many items that can be delet­ed when someone gets into this situation, since many tradelines contain numerous fields, such as date opened, status, late payment, and so on (explained later). Further, what if they fail to deliver? The contracts are often have very restrictive damage remedies, and the venue will likely be in another state. Who wants to get a lawyer in another state? Surely none will take such a small case, one that will likely be limited to actu­al damages, without a retainer of thousands of dollars.

Soon I may offer a credit coaching service that won’t charge clients recurring monthly fees or rely on someone else to perform the work. I’ll simply analyze each individual situation and provide recommenda­tions. If you’re interested in such a service, feel free to contact me using the contact page.

Get all credit service agreements in writing.

If you do elect to hire a third party to handle your credit matters, the Credit Repair Organizations Act is there to protect you from crooked operators. In summary, the law dictates the following:

• Written contracts are required, with full details of services to be performed and estimates
• Under federal law, consumers may cancel within three days of signing an agreement. (Some state laws permit cancellation during the contact period at any time.)
• A disclosure spelling out the basic terms of the Credit Repair Organizations Act is required.

There are exemptions to this Act, such as for nonprofit organ­izations. Again, in recent years the IRS has changed its policy regard­ing the issuance of such exemptions for credit repair agencies in light of all the fraud. And many states have additional regulations concern­ing credit repair organizations that greatly restrict their operation. Many states also permit exemptions for attorneys and mortgage bro­kers. And some allow companies that perform credit repair due to sec­ondary and connected service exemptions. Still others have bonding requirements (required to post money with the state as insurance against loss). Check your state laws.