Living with credit issues can be very expensive. The credit that may be extended to those with bad credit often comes with higher interest rates and may require collateral. It is for these and other reasons that many Illinois consumers seek help to improve their credit scores. And, in response to a growing demand for such services, credit repair agencies (CRA) have increased in number. But, what do they do?
Is a CRA right for you?
Legitimate credit repair companies work to increase the credit scores of their clients. The agency does this by challenging information on the credit reports. They can dispute each entry on the report so that the matter can be investigated by the credit bureau that received the request. Credit repair companies can challenge the amount the customer allegedly owes to a company. They can ask for verification of the debt and, they can disclaim it. They can do all of this online and expect a response after the deadline from the responding creditor has passed.
Beware of Scams
Creditors must respond within 30 days. If they do not, the negative credit item is removed from the report. However, when they verify the credit or otherwise prove that it is accurate, the negative credit remains on the report. Furthermore, creditors do not have to respond to frivolous requests. These types of requests occur after the creditor has verified the information on the customer’s report. However, CRAs continue to dispute the same credit in the hopes that the creditor will miss the 30-day period to respond.
CRAs can legally assist clients who seek their services and can be of great help to those with bad credit. However, their work is subject to credit reporting laws. The Federal Trade Commission advises potential customers to read the fine print. Beware of those companies that guarantee that one’s credit will increase. Furthermore, The Credit Repair Organizations Act mandates that these CRAs provide the full cost of services upfront. If the customer changes his mind, he or she can get a full refund within three business days.