Burnsville, Minnesota – March 5, 2014 – As part of National Consumer Protection Week, which took place March 2 – 8, Better Business Bureau of Minnesota and North Dakota (BBB) offered North Dakota consumers advice on companies offering credit repair services.
Under FTC rules, firms offering credit repair services must offer you a contract describing their fees and services. BBB advises people seeking to repair their credit to be wary of any company that promises a quick and painless way to get out of debt – and then asks for upfront fees.
“Running into credit issues usually doesn’t happen overnight, and the same goes for repairing your credit – despite what some firms might tell you,” said Dana Badgerow, president and CEO of BBB of Minnesota and North Dakota.
Credit service organizations offer education and personalized advice to consumers for a fee. They advertise that they can improve your credit rating or history, help you obtain credit, and offer credit advice or assistance. While there are reputable firms and non-profit organizations that can help you get out of debt, there are also companies that seek to victimize debt-ridden consumers.
The Credit Repair Organizations Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you, and to charge you before they've performed their services. CROA is enforced by the Federal Trade Commission and requires credit repair companies to explain:
If a credit repair company you hired doesn't live up to its promises, you can:
Here are some things to consider before choosing a credit repair firm:
Though some credit repair companies may be able to assist certain customers, BBB echoes the view of the FTC: “The fact is there’s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan.”