Living with bad credit is a nightmare for anyone with big dreams of one day owning a home, a nice car, or maybe even a business or two. But you can’t get to this point unless you improve your credit report.
One way Americans are doing this is by hiring a credit repair company. You’ve likely seen a couple of ads and commercials regarding these services, which offer hope for putting your financial life back together.
But before you begin picking up the pieces with the assistance of a credit repair company, it’s very important to ensure they’re licensed, bonded and insured.
Let’s dig a little deeper into why this is so important.
The Legalities About a Credit Repair Company
Since the early 2000s, the rise in the number of credit repair companies has risen exponentially. This caused the government to get involved in regulating how these operations run.
For instance, the FTC prohibits a credit repair company from stating untrue or misleading representation and demanding advanced payment from customers before services are rendered. The FTC also requires a credit repair company to have contracts in writing, have certain affirmative disclosures for credit repair services, and provide customers with certain contract cancellation rights. In other words, stay away from any company that asks for payment first to help you increase your credit score to a certain number in a short period of time.
It’s illegal for a credit repair agency to promise or guarantee results like this, so this is a red flag.
Next, let’s get into what you should look for in a credit repair company.
They Ask About and Consider Your Unique Situation
There’s no one-size-fits-all solution for credit repair. Every person has their own unique circumstances that will determine their ability to repair your credit profile.
In order to understand your situation, the company should ask you questions. This should help them to understand why you may want to dispute certain items on your credit report. This will then enable them to ensure accuracy, fairness and full substantiation.
They Explain The Process and What to Expect
It’s important that the credit repair company explains the services they’re offering to you so that you fully understand what you’re getting. This includes going into detail about how they’ll represent you to the credit bureaus and what to expect during the rebuilding process. Will they be emailing or mailing your disputes? How will they keep me up to date? Do they offer an online account to track and monitor the progress?
This will give you an idea of whether or not they have the right strategy to help improve your credit and if they are dedicated to your success.
Now, let’s dive deeper into what it means to be bonded.
What Does Bonded Mean?
In a nutshell, when a company is bonded, it means that they secured money that the consumer can access in a claim filed against their agency. For instance, if you end up suing the company for damages, the money will come from the bonds (secured money) the company has.
Bonded money is controlled by the state, not by the company.
Say you end up hiring a credit repair agency and your financial details are stolen during a data breach at their office. You can file a claim against the company. After a proper investigation, you will receive the payout from the bond.
For this reason, you want to only do business with a business that’s bonded.
Does a Credit Repair Company Require Licensing?
The key reason why you want your credit repair company to have a license is that it shows they have expertise and comprehension in their industry. It also proves they have the legal right to operate in your particular state. A credible and reputable credit repair company should be licensed as a Credit Service Organization through the state they incorporated the business in.
Make sure that before you choose a credit repair agency that you ask for their license details if you cannot find it yourself. Find out whether it’s a license to perform all the services you’re trying to get and that it’s valid in your state.
And don’t just take their word for it. Write down their license number to look it up on your own. You may find they’re listed in Google and have horrible consumer ratings.
And that brings us to the next topic.
Finding a Reputable Credit Repair Company
You want to treat your credit repair like you would any other issue you run into. Before you purchase a product or service, you check for quality and credibility of the brand. The same goes for hiring an agency for credit repair.
As we already mentioned, you want to hire a company that’s licensed and bonded. Plus, they should have good practices and ethics to ensure you’re properly represented.
One way to learn more about a company before hiring them is to simply do a Google search on them.
There are plenty of review sites like Google, Yelp, and Angie’s List that you can use to learn more about a company before doing business with them. Look at what the consumers are complaining about, as well as whether the company responded and how they did it.
Are they ignoring valid complaints or addressing them with courtesy and professionalism? Do they offer solutions and other ways to resolve the problem? This all shows the integrity of a business, which is essential when you’re talking about hiring someone to help with something as important as your credit report.
Hiring a Credit Repair Company You Can Trust
Searching around for a credit repair agency is simple when you have the internet. But pinpointing the best one for the job is another story.
By using the above information, you can make a more informed decision about which company to hire. You should also base your decision on the type of services you’re offered.
At Credit Lynx, you get access to a variety of services, which include unlimited disputes and creditor interventions, credit education, credit analysis, personal financial tools and more.
If you’re interested in getting expert credit repair assistance from a reputable, licensed and bonded company, then contact us today!