Thursday, November 30, 2006
The Credit Repair Organizations Act
What Credit Repair Organizations Can’t Do
They cannot make false claims about what they offer. This constitutes false advertising and is severely sanctioned. Moreover, in certain situations companies could be prosecuted and charged for fraud. Those companies who claim to provide you with a new identity or other illegal actions definitely fall into this category. You need to be extremely careful as participating in illegal activities like document’s falsifications, lying to lenders or government agencies and making up a new identity constitute crimes that imply severe legal consequences.
If Credit repairing is the only service they offer, according to the law they are not entitled to charge you until their services have been provided. Requesting money in advance is strictly prohibited unless they provide other services like credit counseling, debt negotiation, consolidation, legal advice, or any other service not related with credit repair. If a credit repair company wants to charge a fee in advance you should doubt of its legitimacy and make sure there are other services provided before working with them.
Also, until you sign a written contract with them, they are not authorized to perform any action towards repairing your credit, not even pulling your credit report. Moreover, after you sign, you still have a three day period to cancel the contract without consequences. That is, you have a legal right to take back your authorization within a three days period without legal or economic consequences. It’s just like if you had never signed the contract.
The Credit Repair Contract
The contract must acquire a written form, spoken contracts are forbidden if the aim of the contract is to provide credit repair services in exchange for an amount of money. The contract has to include a specification of all the charges you’ll have to pay leaving absolutely no cost out of this statement. No money can be requested from you other than what is specifically included in these figures.
It also has to include a complete description of all the actions about to be taken by the credit repair company in order to help you improve your credit. You need to analyze this description thoroughly as some actions may affect your credit in a negative way at the beginning and you may not be able to request finance for some time till they finish their job.
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