Credit Restoration: Know Your Rights
With so many people suffering financially today, it can come as no surprise that many people – even basically responsible ones – have undergone some difficulties and had negative items added to their credit reports. Further, since people’s credit reports are being used for much more than just getting a loan, for example by potential landlords and employers, having a bad credit score can be a serious problem. Under these circumstances, there are a lot of people out there shopping around for assistance learning how to fix credit. If you are one of these people, it is important that you understand your legal rights when it comes to credit restoration and credit repair companies and services.
Credit restoration companies and services are specifically dealt with in U.S. federal law through the Credit Repair Organizations Act (CROA), which was a later additional title added to the Consumer Credit Protection Act in 1996 and was designed to address some of the key issues that consumers were having problems with. The problem with credit restoration services is that they are uniform – the process is the same anywhere in the United States – which means that all manner of shady operators and con artists that learn the basic lingo can offer their “services” anywhere and the Internet really led to a surge of bogus credit restoration companies. Of course there are plenty of completely legitimate credit restoration services as well, but they all – without exception – operate within the legal framework set up by CROA.
If you are considering hiring a credit restoration company to help you rebuild your credit, you should ensure that the company acts in full compliance with the CROA. Therefore you should probably take the time to learn about your rights under CROA before hiring anyone; though one of the law’s requirements is that a credit restoration company has to make you aware of CROA and your rights under it from the outset of the relationship. Other restrictions placed on credit restoration companies include a ban on blatantly false advertising (i.e. like companies promising you completely clean credit in a brief period of time) and a restriction against collecting any fees whatsoever until the associated service has been provided in full.
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