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Educational Consumer Tips

Credit Repair Tips

Author: Better Business Bureau

Consumers should be aware that companies offering credit repair services are prohibited by Title IV of the Federal Trade Commission's Consumer Credit Protection Act from charging advance fees. Specifically, Section 404 of this act states "no credit repair organization may charge or receive any money other than valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed."

BBB warns consumers to be wary of any debt relief organization that:  

  • Charges any fees before it settles your debts
  • Pressures you to make "voluntary contributions," another name for fees
  • Touts a "new government program" to bail out personal credit card debt
  • Guarantees it can make your unsecured debt go away
  • Tells you to stop communicating with your creditors
  • Advises you it can stop all debt collection calls and lawsuits  
  • Guarantees that your unsecured debts can be paid off for just pennies on the dollar  
  • Refuses to send you free information about the services it provides without requiring you to provide personal financial information, such as credit card account numbers, and balances * tries to enroll you in a debt relief program without spending time reviewing your financial situation.
  • Offers to enroll you in a DMP without teaching you budgeting and money management skills.
  • Demands that you make payments into a DMP before your creditors have accepted you into the program.