Facts Consumers Should Know Before Considering Using A Credit Repair Company

 The Federal Trade Commission (FTC) states “Everything a credit repair clinic can do for you legally you can do for yourself at little or no cost". While  the FTC is absolutely correct, I  understand some people do not have the time, patience (or knowledge) to do the work themselves.

Ever wondered about those ads you see from credit repair companies and law firms which offer to fix your credit for a low monthly fee? Your question might be at this point should I hire a credit repair company or a law firm or should I do it myself. That is a great question and unfortunately only you can really answer that.? All I can do is try to give you as much information as possible so that you can make an informed decision. This is why you need to know the advantages and the limitations of credit repair companies

REFERENCES: Get references from the companies you are considering. If they can not provide at least a half dozen you should probably stay away. In the credit repair business you must be alert to scams. If they are legitimate and successful this should be no problem for them. The most important thing about references is that you must call them and talk to  them  This is the most important point of everything on this page.

Another suggestion is to ask family and friends if they know of anyone who does credit restoration on the side on evenings or weekends. These people for what ever reasons are far more successful and far more honest than large credit repair companies.  Also personal referral is the best way to get someone who will actually do a very good job. It is always better to work with a friends friend, rather than strangers, friends care more about you and your problems

CONTRACT: Use a contract. This is not a car repair here. This is your personal financial life we are talking about. The use of a contract is imperative. Your credit challenges took time to accumulate and the repair process will not happen overnight. A good contract protects you as well as the service provider. The contract should be easy to understand and should not need the involvement of an  an Attorney. Spell out in detail the services which will be done as well as the service providers’ limitations As an example. they cannot guarantee the removal of any one particular item but can guarantee an overall increase in fico score overtime

MONTHLY FEES: Most credit repair companies and law firms charge a monthly fee ranging from $49 to $99 per month. They also usually charge an up front fee of the same amount.  The advantage to this is, it is affordable. But there are many disadvantages too.

1.) The monthly payment method gives the credit repair company no incentive to work quickly or aggressively on your behalf. In fact, it is just the opposite. The longer they take the longer you pay. And since you have no knowledge of actually what is going on you do not know. So even if you get a credit repair company to do the work the best investment you can make is getting knowledgeable.

2.) Another challenge of monthly payments is the actual amount of time and effort they will give you to solve your problem. These companies have very high expenses with labor, rent and marketing.  They pay all of this from low monthly fees. This is in real contrast to hiring an individual who you know. These people seem to concentrate on a few clients at a time rather than mass markets.

3.) Credit repair companies charging low monthly fees tend to use automated “template” dispute and correspondence letters. Template letters are very simple form letters which are used for ALL consumers (one size fits all). These are all set up as computer programs with your  information and are mailed out automatically on behalf of the consumers needs depending what they found on the your credit report.

Imagine if most of the credit repair companies and law firms are sending out thousands of these letters a day to the three credit reporting agencies. The reporting agencies of course see they are just all form letters not personal pleas for help. In many cases it has been found that these form letters are ignored or best case moved to the very bottom of the file. Many have been found to end up in the circular file I checked with a friend of mine who used to work for one of the local credit repair agencies. She told me that this company had thousands of template letters they sent out on behalf of the hundreds upon hundreds or their clients. She further stated that the attitude was If they are thrown away we will just send more and the clients will pay their monthly fees.

NON-DISCLOSURE OF METHODS: 95% of large credit repair firms (especially law firms) is their non-disclosure of their methods.  You need to know their methods of how they deal with the credit report companies, credit cards etc.. Remember it is your credit and credit score not theirs. If they  violate laws or makes errors and let me tell you they do both.  If they do you could be held liable for their negligence. Remember again, they are acting on your behalf. There actions and methods can  actually make your credit worse and create problems which are very difficult to clean up. Anther thing, you are paying the bill. They owe you the information as to what and how they are solving your problems.  If they won't tell you guess what. You are probably dealing with a scam or people using illegal methods. Run!

YOUR STATE: Consumers miss this one all the time. If you hire someone to do your credit repair make sure that they are located in the state where you live.  Better yet your home town.  This is essential. Here’s why: if a credit repair company or law firm mails dispute letters or correspondence on your behalf from another state, that mail will be postmarked from that state. When the credit bureau catches them doing this they can mark this as just a frivolous attempt and mark your credit file. You do not want this at any cost. The credit bureaus all talk to each other and if your credit report becomes one marked frivolous it make take years to repair just that damage let alone fix your credit score. There are way around this for credit rpair companies, all of which are not ethical or honest another flag.

CUSTOMIZE: The best credit restoration companies and especially individuals completely customize everything for each individual client sometimes even doing it by hand. These companies are usually very small some even work at home moms.  This is where the real service is located Not only that they are very effective and almost always quicker by miles. These types of small companies however charge more and there up front fees are larger. Further, they work of of only referrals. Doing it in this manner can not be done for $49 to $99 per month. Your choice is do you want it done right or?

If you are unable to find someone in your area (preferably an individual) by way of referral through a friend, relative or professional contact, Then I strongly recommend that you take it into your own hands. I realize most consumers do not want to hear this but the good news is that it will almost always turn out to be the highest paid work you will ever do in your life. How high? How does $500 to $2500 an hour sound? I understand it’s a bold claim but not one I am unable to back up.

If you’re ever going to finance a first or second home (which everyone eventually should for the tax breaks) the difference between good credit and poor credit will affect your interest rate. If you secure a $200,000 mortgage on a 30 year term and your interest rate is only 2% lower because of a high credit score, that 2% will save you $96,934.11 over the course of the loan (just because you had better credit). Take that $96,934.11 and divide it by the 30 to 50 hours you may spend working on your credit situation and you’ll quickly realize credit restoration when done properly does not cost – it pays!

All The Information You Need Is In Our Credit Secrets Bible