Credit repair services and resources for Americans.

The most important first step in researching a credit repair company is to check with the Better Business Bureau to ensure that the company you are considering hiring is listed.

As with any other type of scam, consumers should understand that if a promise sounds too good to be true, it most likely is. Scam credit repair companies often make promises and guarantees that are simply unrealistic. The most obvious of these is in the suggestion that accurate details contained on a credit report can be removed. This is false. No one can eliminate factual data from a credit report.

In addition, any credit repair company that demands payment before any services are provided should be viewed with a healthy dose of skepticism. These scams companies will take your payment and never be seen again.

Warning signs of a credit repair scam as noted by the FTC include:

• Do not suggest that you contact a credit bureau on your own

• Ask for fees before any services have been provided

• Neglect to tell you that credit repair can be completed on your own

• Neglect to inform you of the laws and regulations that protect consumers

• Suggest that you attempt to create a new credit report

• Suggest that you create a new identity

• Suggest that you dispute accurate details contained in your credit report

• Recommend criminal or fraudulent means to enhance your credit score

Vitally important facts for consumers seeking to repair a bad credit report include:

1) It is only you, as an individual, that can request copies of your credit report from the Consumer Reporting Agencies, also known as credit bureaus.
2) Any person or organization that wants payment to access your credit report is a fraud.
3) In accordance with law, consumers are only obligated to pay for credit repair services after they've been rendered.
4) Giving false information on loan or credit applications is a crime.
5) Providing a fake or altered social security number is a crime.

Any individual considering credit repair services is advised to take the time to read the Credit Repair Organizations Act. Knowledge is power, and this Act outlines what credit repair companies are legally able to promise and how they must deliver their services. Important details contained in the Act include:
Credit repair companies cannot make false claims about the services they provide.

Companies cannot receive fees before services are rendered. They must inform consumers of their legal rights in a written contract that outlines exactly what services they intend to provide you with. Included in this outline is the duration of time that the services will be provided, the total cost of services, any guarantees that have been promised, and an expected timeframe within which a consumer can expect to see results. It should be clearly outlined in the written contract that a consumer has three days within which he or she may cancel the contract without incurring any charges or penalties.

As a consumer, you have rights. It is important to understand your legal rights and the laws that allow you to redress any wrongdoing. If you feel that your rights have been violated by a credit repair company, you should file a report with the Better Business Bureau, your local consumer rights advocate, and your State's Attorney General. Although the FTC's mandate is not to pursue individual investigations, it is responsible for following up on legal violations perpetuated by credit repair companies. You can file a complaint with the FTC online.

Under US law, an individual can sue a credit repair company in federal court, can seek punitive damages, and can participate in class action lawsuits. These are all methods through which an individual can recoup losses already paid out to scam companies and individuals.

Read about the new 2006 government crackdown on fraudulent credit repair companies.