Is Credit Repair Legal?
- 8 Comments
- By GoBankingRates Staff
- January 4, 2011
Struggling with bad credit can be daunting and frustrating. The negative impact on your financial future can overwhelm even the most optimistic of people. Don’t lose hope; there are legal ways to get back on track and improve your credit score. Read on for some helpful information.
Are There Laws Related to Credit?
Absolutely. Two laws in particular serve to protect you and your fellow consumers:
The Fair Credit Reporting Act (FCRA) is a federal law enacted to protect consumer rights and privacy regarding the information held by the consumer reporting agencies (TransUnion, Equifax, and Experian). It outlines your right to obtain a copy of your credit report, dispute inaccurate information, etc. It also prohibits third-parties such as potential employers from seeing your credit information without your consent.
The Credit Repair Organizations Act (CROA) is part of the Consumer Credit Protection Act–a larger piece of federal legislation. The purpose of this law is to ensure credit repair companies practice fair business policies, providing their clients with the accurate information required to make an informed decision. Essentially, the CROA regulates what credit repair companies can and cannot do in the name of business ethics.
What Can I Expect from a Reputable Credit Repair Company?
Within the realm of credit repair, straightforward business practices are essential in adherence to the guidelines set by the FCRA and CROA. When selecting a credit repair company, make sure you get the following information before signing on:
1. A written statement of your federal rights. Credit repair companies are obligated provide you with this information before asking for your business. They must also inform you that credit repair can be done on your own.
2. A complete contract with the following details intact:
- The full name and address of the credit repair company
- The amount you are being charged (both initially and monthly, if applicable)
- Details of the services performed on your behalf
- The time period required to perform the services and times in which you will be notified of the progress made
- A statement notifying you that your contract may be canceled within three (3) days
3. In addition, make sure the company does not:
- Blindly promise to remove all negative items from your credit report. Legitimate citations (such as outstanding debt, bankruptcy, etc.) cannot be removed from your credit report until you have either settled with your creditor or paid what you owe.
- Guarantee positive results. Credit improvement depends on the situation at hand, and the CROA prohibits credit repair companies from promising outcomes they may not be able to deliver.
- Expect you to create a new “clean” identity using a federal Employee Identification Number (EIN). Identity Segregation, i.e., concealing credit by creating a new identity is a serious federal offense. The only way to legally erase bad credit is to deal with it honestly.
4. Finally, find the best credit repair advocate by doing your homework. Gather background information about the company by visiting the Better Business Bureau’s (BBB) website. Respectable businesses are registered and rank high on the grading scale (ranging from A to F). Browse through their past complaints and how they were resolved. Educating yourself is the best avenue to choosing a trustworthy credit repair partner.
Is Lexington Law® a Scam?
Absolutely not. Lexington Law’s respect for, understanding of and adherence to the laws and regulations that govern credit repair organizations are a key contributor to their success. All marketing efforts and credit repair services are reviewed by legal counsel, applying a thorough understanding of the nuances of these regulations to assure maximum compliance.
To compete with the brand momentum of Lexington Law, competitors often make questionable guarantees, misrepresentations of their service and inaccurate, accusatory remarks about Lexington Law. The Lexington Law firm will never resort to such tactics and keeps all areas of its practice well within the parameters of the law.
Simply put, Lexington Law represents clients honestly and fairly by obeying federal regulations to the letter. You can expect exemplary service and open communication. Visit www.lexingtonlaw.com to learn more about their services, and take a look at their testimonials to hear how they can help you.