Credit repairs eliminates bankruptcy, bad loans from once file among others. Most consumers do not understand what credit repair does and what it does not do also and whether the company they consider is legitimate. Goal of credit repair is to assist their customers by all means legal or not using tactics like the ones below: One of the tactics is file segregation whereby consumers are directed to apply for IRS for employer identification number and then use the number when applying for credit so that the new credit file is created which the debts of the past will not appear in. Second tactic is identity theft whereby a consumer intentionally or innocently applies for credit using another person’s information that was stolen and also to report unpaid debts accurately as fraud in order for one to escape paying.
For this to be done by consumers they have to fill out a police report and cheat which is illegal. therefore, most credit repair companies are not using their tactics in legal way.
This companies actually want to genuinely assist their customers to improve their credit using three steps as shown below; Firstly, companies asks the clients to forward their copies to them of their credit which are directly obtained from the three agencies i.e Equifax, Trans union and Eperian.
Secondly, the company recommends items client should dispute on the report. Finally, credit reporting agencies are conducted by the credit repair companies to challenge those questionable items on the credit report.the clients have the right to dispute any inaccurate information or incomplete information on the clients credit reports and the credit report agencies shall investigate the dispute without charging the clients. There are several reasons why clients use credit repair and among this reasons is that the customers believe credit repair companies have their own methods of eliminating information known to them only and also they believe that there are mistake they cannot correct themselves on their credit report and finally they are overwhelmed and they require someone to take care of their report on their behalf.
Companies that requires clients to pay before the service, doe not tell the rights of the client and those resisting one not to conduct credit reporting agencies directly are warned of.
Therefore, law does not allow credit company to make false claim about their services and charge their customer before they offer service and finally to perform any task without client’s signature. Clients contract should specify terms of payment, description of service, time taken for results to be obtained, company’s name and address and finally any assurance the company offers.