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Credit repair clinics: Do your research well before choosing any one

Credit repair clinics: Do your research well before choosing any one

You need to know your rights regarding credit repair well, if you want your credit file to be wiped clean of all negative items. Moreover, you should stay away from the credit repair clinics for that matter since, in reality, there’s nothing that you can’t do on your own to fix your credit.

What is the function of CROA?

CROA stands for the Credit Repair Organizations Act. This federal law governs all the for-profit credit repair clinics that operate in the country now. Here is what the law states:

  • Credit repair clinics should provide you with a statement of your rights as a consumer under the Fair Credit Reporting Act in writing.
  • Any credit repair clinic cannot ask for fees until they’ve delivered all the services as promised to you.
  • Credit repair clinics should appropriately declare what they can and cannot do.
  • You should receive a written contract from your credit repair clinic.
  • You are allowed to terminate the deal within three business days of inking the agreement.

Credit repair clinics that do not observe these rules as per the CROA, the requirements will then be considered as void and you cannot sign away the rights mentioned in it.

What state protection do you enjoy

There are some states that provide extra coverage to its people with respect to credit repair and credit repair clinics. Here are some of the additional rules that they follow along with the federal ones:

  • Credit repair clinics must provide you with over three days to terminate the service deal.
  • Credit repair clinics must deliver results within a certain time-frame.
  • These clinics should inform you about other non-profit credit counseling agencies before you choose to work with them.

What can do you in case of CROA’s violations?

You can sue a credit repair clinic for violating the CROA. However, you’ll have to do that within 5 years from the date when the violation actually happened. A court may provide you with a compensation regarding the actual damages, attorney’s fees and press punitive charges on the alleged CROA violator.

What online resources are available on credit repair?

Here are some of the resources that you may use online to repair your credit:

myFICO – You can obtain your credit report against the payment of a small fee. You can find out the factors that directly affect your credit rating and also find out the ways to boost as well as safeguard your credit score. There are a lot of information regarding credit cards, auto loans, mortgages, student loans and so on.

The National Foundation for Credit Counseling (NFCC) – You’ll get information related to the credit counseling industry from NFCC’s website. Apart from that, you can go through its national directory to find out a member credit counseling agency of your state. These agencies are non-profit ones and have professionals who are trained by the NFCC with necessary certifications to work as credit counselors. These counselors provide pre-bankruptcy counseling too.

The Federal Trade Commission (FTC) – The official website of FTC has got an online credit repair fact sheet that is meant to alert consumers like you in order to avoid becoming a victim of credit repair scams. Moreover, the sheet also discusses tips regarding do-it-yourself credit repair process.

The Association of Independent Consumer Credit Counseling Agencies (AICCCA) – You can visit this website and click on the ‘Find an Agency’ button to get a list of credit counseling agencies operating in your state that are members of this pro-consumer advocacy organization. For more information, please visit – www.creditmagic.org

In addition to the above, you can get free credit report once in every 12 months from the website AnnualCreditReport.com, as provisioned under the federal law. The website also has a section devoted to frequently asked questions on topics like credit card fraud, taking advantage of fraud alert through your own account, disputing credit information on your report and requesting for credit reports multiple times in a given year.