Credit Repair Disputes – Why the Credit Repair Organization Fees Are Always a Double-edged Sword

Credit repair is a growing industry that provides individuals and businesses the ability to improve their credit standing. With an improved credit rating, you can obtain loans easier and qualify for more favorable rates on your home, vehicle, and many other consumer purchases. However, with so many companies Credit Repair Service claiming to be able to help repair your credit, it’s important to research and choose a company carefully. There are many things to consider when choosing a credit repair company. This article focuses on just a few of these items to assist in your search for a good credit repair service.

Credit repair software allows consumers to quickly correct inaccurate data and errors on their credit reports, and to improve their Credit rating. To begin, it is important to know that the Fair Credit Reporting Act gives you the right to dispute inaccurate data, and that the credit bureau should investigate the validity of your complaint. Once you have filed your dispute, the agency must respond in writing with all of the supporting documentation to prove that your complaint is valid. If they cannot provide such documentation, then they must remove the disputed item from your credit report.

Many times creditors will attempt to avoid taking further action, hoping that the debtor will eventually file a complaint with the FACT act agency and then use the resulting damage as leverage to force the creditor to take further action. One way that creditors attempt to manipulate credit repair attempts is by issuing what are known as “courier intervention” or “creditor interventions.” This is where the creditor writes to the bureau challenging the accuracy of a particular item. Often times, the creditors will provide documentation that substantiates their claim. In turn, the bureau must investigate the validity of the creditor’s claim.

One common practice in the credit repair industry is to charge a one-time, non-refundable, service charge for their services. In this scenario, the consumer must pay a monthly fee to remain on the “BASE” list. If you stay on the BASE list for six months, then the “Creditor Intervention” fee charged to you will be applied to the balance due on your account. While this method does not require a lot of research and may seem advantageous to some, it is actually a sneaky way for the credit repair company to profit from your struggle. If you had a legitimate complaint against a particular transaction, the original creditor should have been required to reimburse you for any costs associated with that transaction.

A better solution would be for the consumer to request that the credit repair company negotiate a payment plan or a settlement that does not require a one-time, non-refundable service charge. For instance, if a consumer files a complaint regarding an auto finance charges, the creditor may send a letter of dispute regarding the charges to the bureau, requesting that the matter be investigated. In many cases, the agency will send back a letter of dispute citing that the transaction was processed correctly and that the charges were properly paid. In these instances, the consumer would be better served by contacting a third party debt arbitrator or paying the monthly fee required by the Credit Repair Organizations Association (CROA).

A third option is for the consumer to contact the CROA itself, in which case, it is possible that the organization will refer the consumer to a credit repair attorney or a law firm. In addition, there are also free consultation options available through the CROA. These free consultation options allow the consumer to speak one-on-one with a CROA representative who can evaluate the case and provide advice on the best way to proceed. If the case is not as simple as the consumer believes it to be, the consultation may end without any resolution because the representative may recommend that the case be referred to legal counsel. As always, it is a good idea to speak with a credit repair attorney before proceeding.

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