If you are struggling with a poor credit score, you might consider hiring a credit repair company to help improve your financial situation. Credit repair services advertise themselves to you as fighters who will work to protect you and maintain your ability to be a worthy borrower. When trying to obtain credit, you are what your credit score says you are, and lenders can reject your credit application if they feel you are a risk. If you do not pay back the money you owe, a lender will have to write off your debt and sell it to a debt collector for pennies on the dollar. Creditors do not always furnish the correct information, and you can end up paying a price when they deny you credit.
Credit repair services claim to help you by monitoring your credit and alerting you to take action when something is amiss on your credit report. They offer you services at various levels, but the unfortunate reality is that the price they charge is disproportionate to the level of service they provide you. Along the way, they may have made many false promises to lure you into using their services.
If you believe you have fallen prey to a credit repair service’s deceptive sales practice or other illegal tactics, you can sue them directly. Further, you can also file a direct lawsuit if a credit bureau or information furnisher has failed to comply with their legal obligations under the Fair Credit Reporting Act. Numerous things can go wrong when you are a consumer who owes money. A fair credit reporting act lawyer can work to get a financial recovery when someone has broken the law, and you have lost money because of their actions. They will also be your advocate in seeking justice and compensation. Contact a consumer protection attorney to schedule a free initial consultation to discuss your case.
Your Credit Score and Report Is Crucial to Borrowing Money
Your credit report consists of an overall score and several entries relating to the accounts you have opened or closed in the past. Creditors will report your account information and payment history to the credit bureaus. It will become part of your credit history if you have been late with a payment or had other adverse financial events. For example, a bankruptcy or a tax lien can crash your credit score and make you appear a risky financial bet for lenders.
Information furnishers and credit bureaus do not always get things right. Whether it is because of carelessness or cutting corners, there may be inaccuracies on your credit report that can cause you harm. The last thing you want is for lenders to deny you credit because there is derogatory information. Financial experts always advise you to be vigilant about your credit and never to hesitate to challenge anything that appears wrong. There is a legal mechanism in place that allows you to file these challenges.
Credit Repair Services Claim to Offer a Valuable and Independent Service
It is in this role that credit repair services come into the picture. One of the main tasks that credit repair services perform is to identify and dispute incorrect information on your credit report. They take on the role of your representative when communicating on your behalf with creditors and credit bureaus. They claim that they have specific experience that allows them to advocate effectively on your behalf.
Credit repair services will start by requesting copies of your credit report from the three major bureaus. They may review the entries to see if you believe they are valid and monitor your credit to alert you when certain things appear on your file.
Credit Repair Services Cannot Wave a Wand and Fix Your Credit
A credit repair company working on your behalf is no guarantee of success. Credit repair services cannot repair your credit when the derogatory information is valid and cannot force the credit bureau to remove this information. They can only provide effective representation when the information is incorrect, and the credit bureau has a legal obligation to remove it.
Credit repair services market themselves as experts, but in reality, they have a skill set that practically anyone can have. Still, a credit repair service can be helpful when you do not have the time to deal with matters yourself or are afraid to deal with credit bureaus. The hope is that your credit score can improve when they help remove any incorrect entries from your report. Some people turn to credit repair services when they have bad credit and know they need to take out loans soon.
Credit Repair Services Also Offer Other Unnecessary Help
Credit repair services also offer various other services and claim to be “one-stop shopping” for all things credit. For example, they may offer you credit counseling and provide you with tips on how to improve your creditworthiness. However, you can easily find this information for free on the internet. They make you believe that they are credit experts and can put you in a position to better your situation. Many people deep in debt and want a brighter financial future may believe that credit repair services can help them. Although not all these services are unhelpful and fraudulent, they are usually not worth the money.
In many ways, credit repair services ask you to pay a large sum of money for something you can do on your own. You can continuously monitor your credit and take action when there is something wrong with your credit report. You can even request one free credit report from the three major credit bureaus each year.
You Can Deal with Credit Bureaus on Your Own Without Help
You can file a dispute with the credit bureau if you see incorrect information on your report. Provided the dispute is not frivolous, the credit bureau must investigate your claim and provide you with a response within thirty days after you file it. The credit bureau has to investigate and remove any information they learn is wrong after conducting an investigation. They must dig into the facts of your dispute instead of simply listening to what the information furnisher has said. If the credit bureau does not follow the law, you can sue them directly under the FCRA. Thus, the credit repair service does not necessarily add value to their charges.
In fact, one of the first things you see when you do a Google search on credit repair services is, “What do credit repair services do that I can’t do on my own?” The sad truth is that the answer to this question is very little. However, how these services market themselves makes it look like they are doing something you cannot.
Credit Repair Services May Not Always Do What They Get Paid For
Credit repair services do not always do what they have promised. Along the way, they may charge you exorbitant fees after they have sold you false hope. They have increased their profits at your expense, making a difficult situation even more dire for you. The problem is that many credit repair services try to give you the impression that they have locked you into a contract and you cannot cancel their services. That is the exact opposite of what it says in federal laws. You always have the right to cancel a service at any time, and nobody can tell you no.
Credit Repair Services Often Use Wrongful Business Practices
Consumers are increasingly complaining about credit repair services and their operations. Many are filing complaints with the Consumer Financial Protection Bureau, alleging that credit repair services defrauded consumers. The CFPB has advised consumers how to detect signs of fraud by credit repair services that can include:
- Demanding payment for their services upfront instead of over time
- Making promises that sound too good to be true
- Being unable to answer questions or refusing to provide a direct answer
- Not fully disclosing information or making misrepresentations
- Asking you to make misrepresentations as part of the effort to repair your credit
The CFPB has the right to take enforcement actions against credit repair services. They may or may not distribute the money received in any settlement or enforcement action to the people who the credit repair service’s actions have wronged. Even if you have complained to the CFPB, you should not wait for them to act and hope you get some money. You can and should take legal action against the credit repair services that defrauded you on your own.
When a credit repair company engages in deceptive practices, their actions give you false hope and exploit your vulnerable financial situation. A consumer lawyer can protect your rights by filing a complaint with the appropriate regulatory agencies and pursuing legal action if necessary.
The Credit Repair Organizations Act Gives You the Right to File a Direct Lawsuit
Federal law gives you the right to file a lawsuit against credit repair services. There is a specific federal law on point called the Credit Repair Organizations Act. The CROA was passed by Congress in 1996 and signed into law by President Clinton. Congress passed this law in response to a surge of complaints against these companies by consumers who fell victim to its abuses. Unfortunately, the law has not been fully effective, as there are still scores of complaints and lawsuits people file yearly against credit repair services.
The law should prohibit certain abusive practices. One of the main features of the CROA is a type of “truth in advertising” provision that prohibits unfair or deceptive business practices. The CROA also allows you to file a lawsuit against the credit repair service to obtain financial compensation. The law will enable you to recover the money you spent with the credit repair service or your actual damages, whichever amount is more significant. In addition, you may even have a legal right to punitive damages if you can show egregiously wrongful behavior on the part of the credit repair service. The law even allows you to recover attorney’s fees and not have to pay your consumer protection lawyer from the proceeds of your settlement or jury award.
A consumer protection lawyer is well-versed in consumer protection laws and regulations. They have a deep understanding of the FCRA, the CROA, and other relevant laws that govern the credit repair industry. With their knowledge and experience, they can identify when a credit repair company violates your rights and hold them accountable for their actions.
Why You Need a Consumer Protection Attorney for Your Case
You stand the best chance of taking on big business when a consumer protection lawyer represents you. An attorney can review the facts of your case and let you know whether you have grounds for a lawsuit. Your initial consultation with a consumer protection attorney is free; they never ask you to pay them any money. The only way that a consumer protection lawyer gets paid is if you win your case. Then, under the law, the credit repair service may need to pay your attorney’s fees. You do not have much chance of winning your case if a consumer protection lawyer is not representing you, so the time to get legal help is today.
In the meantime, a consumer protection lawyer can advise you of your rights if you do not know them. They can file a class action lawsuit on your behalf if numerous people have been affected by the same wrongful actions. A consumer protection lawyer can even negotiate a settlement to your lawsuit, paying you damages without needing a trial. There is no financial risk to you to hire a consumer protection attorney, and you have everything to gain.
A consumer protection lawyer can help you obtain the compensation you deserve. If a credit repair company’s unlawful actions have caused financial harm, a lawyer will seek damages for any fees paid, legal expenses, and even emotional distress. Working with an attorney can maximize your chances of recovering your losses and ensure the credit repair company faces consequences for their misconduct.