As sad and in my opinion sick as it is, when people are at their most desperate that’s when the vultures attack. Why is is that people, and I use the term loosely, decide that when someone is at their lowest, let’s just kick’em when they’re down. For shame and poorly done. This is not to say that anyone or everyone in the “credit restoration” or (shiver) “credit repair” industry is pulling a scam. In fact just the opposite.
Most people are not aware that credit restoration companies are regulated by the Credit Repair Organization Act of 2005 and were we not lumped in with the payday loan companies and a few other iffy type industries we would not even make the top 500 worst industries with which to do business. I believe we rank 542 with the FTC falling behind video game makers if you can believe that.
The truth of the matter is that we have a stigma, and not undeserved. However, since 2005 and moving forward the ones that take this industry seriously want to remove that stigma and create an industry that can be helpful, but also one that doesn’t immediately scare the hoohaa out of a client just by considering speaking to us.
Okay, so now that we have discovered that basically EVERY industry has good and bad guys, let’s talk about how to tell the white hats from the black hats in credit restoration.
1. Do they ask for a lot of money up front?- This is a no-no. Although most CRC’s (credit restoration companies) will take a small set up fee, this covers actual work being done. This should encompass your first letters, postage, etc. All of which is money out of the pocket of the CRC. The reason that I charge a small fee is that like CRC’s there are clients that are out for a free ride as well. I cannot tell you how many clients get what they want out of the program and then suddenly decide that I don’t need to get paid for my work. The laws are scewed in favor of the client wherefore we must perform a task prior to payment. This is why letters are sent before your first check is cashed.
2. Do you have contact with the company?- You should then have contact with your case manager on at least a monthly basis. Again, services must be provided prior to payment being made.
3. Does your CRC understand your goals, i.e. home purchase, car, clean up credit, etc?- Do they have a plan and timeline?
4. Do they guarantee results?- CRC’s may NEVER guarantee an outcome. If someone promises you such and such will happen…run far and run fast!!!!
5. Do they “require” you obtain one of their credit cards?- Chances are they are getting a kick-back and while it may be fine, ultimately this entire process is meant to be looking out for your best interest not theirs.
6. Are their fees reasonable?- I am about to lay the truth out to you. Unless you are a victim of identity theft, almost any fee is reasonable, within reason (follow that?). Working on your credit is not going to be free. Even the so called non-profits can become quite expensive. Unreasonable is anything that makes you think twice.
Okay, so you weren’t real smart about the whole credit thing, but you probably have a sixth sense when it comes to someone trying to fleece you. Especially combined with any of the above scenarios.
There are other ways to tell, but sometimes it will just be in the way that the rep speaks with you or the feeling that you get from them.
The best programs are the ones that offer not only work on the adverse accounts, but assist you about education in obtaining new and good positive accounts. If all you wanted to do was get rid of “bad” credit you would file for bankruptcy, but if you want to learn to have and use credit to your advantage, find a CRC that offers both.
Courtesy of DeAnne West