The Credit Repair Organization Act, How Does It Help The Consumer?

Let's talk a bit about consumer protection.  The Credit Repair Organization Act or (CROA) defines how credit repair organizations are allowed to operate.  The Credit Repair Organization Act keeps a vigilant eye on credit repair companies and hears consumer complaints against such companies.

We will use the initials CROA in this blog when we refer to the organization.  The CROA, was enacted to ensure consumers of services of credit repair organizations, or companies are provided with information necessary to make informed decisions regarding the purchase of such services. Also, and most important the CROA's duty is to protect the public from unfair or deceptive advertising and business practices by
credit repair companies and organizations.

The CROA requires the following from companies and organizations claiming to repair credit:

1. There must be a written disclosure stating that the consumer has a right to "sue" the credit  repair company if they violate the CROA.
2. The CROA contains a provision that voids any waiver by the consumer rights provided by the CROA.

It is not illegal to be a credit repair company in every state of the UnIted States except for
Georgia, where it is a misdemeanor.  It is legal in every other state to be a credit repair company
as long as it compllies with the rules of the CROA.

Here are 2 rules you should watch for:

1.   The credit repair company can not bill you in advance for services not yet performed.

2.   The credit repair company must disclose to you the consumer in writing that you can
     challenge damaging information on your credit report for free.

Know what credit repair companies can and can not do for you. Do not become a victim of a scam or a fraud.

The advertising offered by these companies sounds great, but know this, accurate information both negative and positive can not be removed from your credit report by using credit repair fraud.  Negative credit stays
on your report for upto 7 years.  Bankruptcies stay upto 10 years.

The Credit Repair Organization Act came into existance because of complaints from so many consumers
that had been victims of repair scams and fraud.

There are companies out there that in fact are honest businesses.  The consumer has to be informed
of rights before committing to any of these companies.  Knowledge is important.

I have written about the red flag signals before regarding a credit repair company, but I believe it is worth
putting the information in plain site again, so here goes:

1.  The credit repair company asks you to apply for an Employer Identification Number to use when
     applying for credit instead of your social security number. This is fraud.

2.  The credit repair company requires payment up front.  This is a violation of the CROA.

3.  The credit repair company does not inform you that whatever they can do for you, you can do
     for yourself at little or no cost.

4.  The credit repair company does not allow the client to contact the creditors on their own behalf.

The Credit Repair Organization Act is there to protect the consumer.  We as consumers also have certain
obligations.  One of them being it is our reponsibility to check who we do business with.

The most logical thing to do is consider all the options in front of us and choose wisely.

Read what the Better Business Bureau has to say about credit repair fraud and also information from
the Federal Trade Commission.

There is a difference between credit repair companies and credit relief companies.
Credit relief companies do not claim to eliminate your bad credit.  I have researched credit relief companies as stated in earlier blogs and I have found 2 that I consider to be worth considering:

Curadet

Debt Consolidation

Be informed and take control. I wish everyone the best.

"If you're walking down the right path and you're willing to keep walking, eventually you'll make progress" - Barack Obama