Struggling with bad credit is okay but not doing anything about it is not. But once people start demanding credit repair services, the company's serving them begin to take advantage. Meanwhile, many people have developed a view of credit repair companies being illegal altogether. However, that is partially correct.
Here, we will try to identify some unethical practices by credit repair companies to categorize them as a fraud. These are some that are illegal and outside the regulations of the country. It's to avoid them exploiting their customers. Also, it's to make the customers aware of how to genuinely rebuild credit score.
The Subtle Signs
The signs are mostly subtle and one has to notice their behavior to spot the fraud activity. Let's go through each of them.
Charging Money in Advance
It is the most prominent practice that credit repair services do. They promise some services and ask for money in advance before actually starting. From their perspective, it's to make sure that even if the services don't offer the promised results, they don't lose out on their income.
Suggest the customer create a new identity to start from scratch
Making a new identity of yourself is never the solution to bad credit. In fact, it is illegal to create a fresh credit profile and hiding negative data from the past. Any credit company that suggests such action is definitely illegal and fraud. Steer clear of such fast credit repair actions.
Guarantees about the future you win if it's outside their control circle
In order to lure customers into choosing them, credit repair companies generally make fake promises about some factors that are out of their control. They make misleading representations of their abilities. The promises they make the sound too good to be true. However, the only thing they can do is correct and disputed information on your report, and communicate with the credit reporting agencies.
Moreover, no credit repair company can provide expected results within a day. It takes at least 1 to 2 months to complete the task. If they promise overnight results, you don't give them your trust.
They don't give you any margin for error
Even if the results expected are not achieved after some constant efforts, they force you to fall into a trap. It's their way not to let you out and keep on spending your money on. There's no margin for error even if they fail to complete their job.
They don't let you exercise your legal rights
Every customer of credit repair has some legal rights to exercise. Some of them include written statements, disclosure of every piece of information, etc. If you experience anything departing from these legal rights, it's a visible red flag.
They tell you not to contact any credit report agency
Credit repair is a process of altering your information conveyed by the credit reporting agencies. While they can be right in suggesting not to contact any reporting agency, they can also use it to their advantage. It's a very subtle sign as you have to identify what they're up to.
Their trustworthiness depends upon past habits and customer reviews. So, always make sure that they have an official website to be transparent enough for the customers to trust them fully.
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