Credit repair and you: Take precautions when you have debt

snerfuStarred Page By snerfu, 21st Aug 2014 | Follow this author | RSS Feed | Short URL http://nut.bz/3q3ani29/
Posted in Wikinut>Money>Debt

One needs a credit repair agency when one has poor credit scores. How effective are they and can we trust them? What should we do when we fall in debt? Here we look at the answers as well as some of the rights that everyone has.

Need for credit repair agency

Credit repair is specialized service for those who have poor credit scores. People often fall in debt when they have some crisis in life like illness, overspending or loss of job.

Every one has problems especially those whose credit scores are low. Most often one turn to credit repair agencies, thinking everything will be all right. However, there are things you have to know about credit repair agencies first. One must make an effort to keep their credit scores above par.

Keep scores above average

For getting a good score one has to follow a thousand conditions some of which include:
• Paying off your debts in time
• Keeping within the limit
• No overspending on credit
• Using only one or two debit or credit cards

Low credit scores lead to hardship

Myriad problems people with poor credit score face
Higher lending rates by lending agencies
Lower employment opportunities
No chance for higher limit on loans
Sometimes refused credit

Tackle debt situation

To handle the debt situation, one must check out these options first.
a) Debt consolidation
b) Debt settlement or credit counseling
c) Use of debt relief services
d) Self help
*(I will be elaborating more on these topics in my subsequent articles)

Things a credit repair agency will do

Credit repair agencies will make effort to raise your credit score. They can correct any mistakes that appear in your credit report. They will advise you on correct course of action to lower your debts and increase your credit limit.

One can employ credit repair agencies but even then, one has to be cautious. Many agencies exist that do not deliver. They promise and then fail to do what they promise. This is illegal and you have recourse under law.

I) Check periodically your rights

Among your rights, you have one that is most important. No one can alter anything that is rightly reported on your credit report. So even when you have some negative information on your credit report, it remains there. No credit repair agency in the world can alter it.

• Regarding information on your credit report, you can ask for and obtain an investigation if you say that piece of information is incomplete or false to an extent.
• Law provides you scope to these following things.
a) No-cost credit report for any action concerning credit instigated by companies that normally should give and do give credit
b) Your free credit report copy is made available to you by the concerned credit reporting company (Equifax, TransUnion or Experian)
c) You can freely dispute (that is without incurring any cost) any outdated items or any mistakes

Start on your own

Here are the things you can begin on your own if you want.
1) When reporting any inaccuracies, begin with Photostat copies of documents that show inaccuracies in information
2) Point out why the piece of information is inaccurate
3) Tell them you want that information corrected
Credit reporting agencies will investigate all pertinent complaints within 30 days. If it is proved in course of investigation that there exist inaccuracies in your credit report, then investigating agency must provide the evidence to nationwide company for credit reporting so that correction could be made to your file.



Credit reporting company hands over a copy of results of investigation to you. Subsequently, any item that has been changed or deleted cannot be added to your credit report without consent of information provider agency. In addition, they must also send reports to all concerned people who have in the course of the past six months, had received copies of your old credit report. You may have to give some money to the credit reporting agency for doing you this service.

Know your rights are protected

II) Credit Repair Organizations Act: According to this act, it is illegal for any credit repair agency to charge you fees for services they have not yet done or make false promises about what their service is about regarding credit repair.

Federal Trade Commission is responsible for enforcing this Credit Repair Organizations Act (CROA). Under this, credit repair companies are required to tell you (or give) things like:
i) Service copy (things the credit repair agency will do) should be a written contract that includes your legal rights
ii) It should state how long it will take to achieve results
iii) It should mention guarantees (this depends on the company)
iv) You have the right to cancel contract within 3 days without incurring any cost
v) It should also mention the cost you will pay in all


Take action when credit repair organizations do not meet their target. When some credit repair agency fails to deliver, you can resort to one of the following things.
1) Ask for punitive damages
2) Sue them for actual loss you incurred
3) Initiate a class action against the erring company

How to get help

Having low credit scores or poor repayment history will cause some institutions to withhold credit to you. But, if your repayment history has improved or you have paid up your outstanding amounts, then you can avail of help depending on your financial situation and choice of method for tackling debt or poor credit score. Use credit repair agencies with proven record of accomplishment. Often they will only be able to achieve very minimum progress.

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Tags

Credit Repair, Credit Repair Agencies, Credit Repair Agency, Credit Report, Credit Score, Debt

Meet the author

author avatar snerfu
Bachelor, Christian, 53, settled in Madurai, India, like to watch football and tennis on TV. I also have occasional walks but try to read the Bible daily. For amusement, I read the newspaper.

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Comments

author avatar Retired
21st Aug 2014 (#)

I haven't used my credit card for years - this sounds to me like a good way of staying out of trouble!

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author avatar snerfu
21st Aug 2014 (#)

Ha ha for sure. And I keep out of Mom's way especially in the mornings.

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author avatar Bill Harbin Jr
21st Aug 2014 (#)

Really good facts given here. All my life I have always paid my credit cards if full each month and it has kept me out of trouble. In fact, I even MAKE money on my credit cards each month with reward points!

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author avatar snerfu
22nd Aug 2014 (#)

Right Mr Harbin, wisdom lies not in the words, but in the action. Good for you.

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author avatar Nancy Czerwinski
21st Aug 2014 (#)

Great article and tips. Thanks for sharing.

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author avatar snerfu
22nd Aug 2014 (#)

Hello Nancy, you are always welcome. Thanks for the look up.

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author avatar cnwriter..carolina
22nd Aug 2014 (#)

great information here...it will help a lot of people I am sure...

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author avatar snerfu
22nd Aug 2014 (#)

Definitely cnwriter, good to see you.

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author avatar Erly
22nd Aug 2014 (#)

Very impressive article....we need to be debt-free and let money work for us and not against us.Thanks for sharing this.

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author avatar snerfu
22nd Aug 2014 (#)

Hello Erly, you have pinned it. More importantly it is nice to see you. And thanks for stopping by.

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author avatar Phyl Campbell
22nd Aug 2014 (#)

Debt management is so important. Debt is not always avoidable, but sometimes you have to know how to avoid getting in too deep -- or how to get help if in over your head.
With apologies -- I can't actually read the article, and I'm going off comments to say something that will pass as intelligent.

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author avatar snerfu
22nd Aug 2014 (#)

Ha ha Phyl the headline reader! Thanks for your comment, it will show up in search engines and so I will get more readership. Very intelligent comment too!

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author avatar Retired
22nd Aug 2014 (#)

Good info here. How much does it cost to use a credit repair agency?

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author avatar snerfu
25th Aug 2014 (#)

There are agencies that offer their services for $799 (per person) but the industry average is only $69.90 to $90.90. People with lower credit scores (that is below 600) might have to pay more. Lastly, you can do credit repair yourself. The agencies are for those who do not know anything.

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author avatar snerfu
25th Aug 2014 (#)

That is cost per month -- you pay until your credit is fixed. So, you get it in writing, the time it will take, before hand.

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author avatar Sivaramakrishnan A
23rd Aug 2014 (#)

It is better to remain out of harm's way by spending within limits, but that is more easily said than practiced. Thanks for showing the way to those having trouble with overspending and inaccurate recording, great post Snerfu - siva

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author avatar snerfu
25th Aug 2014 (#)

This article is only for those who are in the woods regarding credit repair. I am sure you will know more tricks than the leaves on the trees to adjust credit and balances Mr Siva.

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author avatar Sivaramakrishnan A
25th Aug 2014 (#)

I know, Snerfu - banks here in Singapore give next to nothing for deposits with them - almost zero per cent, but charge 25% for credit card overdue! It is like getting swept away in raging waters - siva

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author avatar snerfu
25th Aug 2014 (#)

That is pretty awful Siva. Like you said, the idea is to keep within the limits always.

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author avatar Ptrikha
25th Aug 2014 (#)

Good guiding Article, but I think, things might be done in a different way in India?

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author avatar snerfu
25th Aug 2014 (#)

Ptrikha, things in India are pretty much the same as anywhere except when you sit down to eat. You eat with your fingers and at sumptuous dosas, idlis and pooris.

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author avatar Ptrikha
16th Sep 2014 (#)

Do we have reliable credit repair agencies in India?

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author avatar snerfu
16th Sep 2014 (#)

You can get counseling for your problem at reputed agencies like CIBIL or Credit Repair India.

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