Credit Repair – Self HelpCaveat Emptor –  noun
the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.

Caveat Emptor – in language that even a layman should be able to understand, the principle of “let the buyer beware” is a sensible watchword regarding any purchase – substantial or otherwise – that a consumer may contemplate making.

When it comes to selecting a “credit repair” service or agency, the warming may be particularly apt. In the area of credit “repair”, the offerings are widespread and not always to be trusted without thoroughly vetting both the providers and the “services” that they offer.

In many, if not most instances, the “do it yourself” approach may be a consumers best bet when attempting to improve their credit and credit worthiness.

Today, a consumer who is in financial straits will see advertisements in newspapers, on Television, and, very frequently, as “pop-up ads” on the internet. Consumers get phone calls, flyers in the mail, and email messages (mostly in the “spam” category), all pushing some sort of “magic” that will result in “clean credit” or “greatly improved credit scores”.

Caveat Emptor!

All of these seem to make the same claims that are enticing and not to be believed (in many cases).

You may hear or read differing versions of the following:

  • We can totally erase your bad credit – 100% Guaranteed!
  • Create an entirely new “Credit Identity” – LEGALLY!
  • Credit Problems? NO Problem!
  • Let us remove bankruptcies, judgements, liens, and bad loans from your credit record forever!

An aware credit repair-shopper will be wise to be aware and wary when enticed by such claims as these. Mostly likely, they are credit repair scams or “swindles” and not legitimate ways to repair credit and get a clean financial start with an improved credit score.

The claims noted above, according to lawyers for the Federal Trade Commission (FTC), one of the nation’s consumer protection agencies, are not being made by legitimate credit repair operations. Those same lawyers caution that there is NO “quick fix” solutions to improve credit, credit scores, or credit worthiness. One FTC lawyer stated: “Concerned credit consumers can improve a credit report legitimately, but it takes time, a conscientious effort, and sticking to a personal debt repayment or improvement plan”.

Consumer advocacy groups offer the following tips for consumers concerned with bad credit and self-help steps they might take to improve it: know your rights, eschew “credit repair” “experts” for a DIY approach, always report inaccurate information on a credit report, and report credit repair fraud.

Knowing Your Rights

Many credit consumers are unaware of some basic rights available to them for protecting their credit, credit reputation, and financial status.

Anyone can ask a credit reporting agency (such as one of the Big-3 in the United States, Equifax, Experian, and Transunion) to undertake an investigation of any item in a personal credit report that they believe is inaccurate. Credit reporting agencies are required by law to undertake such a requested investigation unless it is deemed to be “frivolous”.

An “adverse action” by a company – such as denial of credit, rejection for insurance, or a non-hire decision – entitles the person so negatively affected to a FREE copy of his or her credit report upon request. A consumer has sixty (60) days from the date of receipt of notice of the adverse action to request the free credit report.

Likewise, unemployed people planning to seek employment within sixty (60) days, people receiving government assistance (“welfare”), and those who have inaccurate information in their credit report due to fraud or identity theft are all entitled to one free credit report per year.

When requested, each of the major credit reporting agencies is required by law to provide consumers with one free credit report every twelve (12) months. Requests to the three agencies can be made at the same time, or the requests can be made periodically throughout the year until all free copies are received.

Finally, disputing mistakes or inaccurate information in a credit report costs the consumer nothing but time and the cost of postage (make all requests in writing via certified mail).

DIY (Doing it Yourself)

A self-aware and proactive consumer can do everything that a hired company might do to effect credit “repairs” and at little or no cost to the consumer. A consumer who believes their credit report(s) may include mistakes or inaccurate information doesn’t need a company picked from the internet or one that solicited him or her to make changes that will eventually result in improved credit and credit scores.

The steps are few (communicating with credit reporting agencies and/or data furnishers to point out mistakes and inaccurate information, requesting an investigation, then follow-up) and only require time, attention, persistence, and thoroughness.

The Credit Repair Organization Act (CROA)

The CROA, enforced by the Federal Trade Commission, makes it illegal for credit repair companies to 1) lie about what they can do for a consumer, and 2) charge the consumer in advance of performing contracted-for services. The Act requires credit repair companies to explain: consumers’ legal rights in a written contract that outlines all services to be performed; the consumers’ three-day right to cancel; the length of time to obtain results; the total cost of the contract; and, all guarantees stated in the contract.

A credit repair company that doesn’t live up to the full extent of its contract may be sued in federal court for breach of contract. Since a failure on the part of the company would not only be a breach of contract, but also a violation of law, punitive damages to punish the company for the law violation (not the breach of contract) may be available to a suing consumer. In cases where others have been violated in the same manner by a single company, consider filing a Class Action lawsuit where attorney fees are likely to be awarded.


Let’s end here as we began – Caveat Emptor!

Be wary of solicitations from credit repair companies that may seem to be “too good to be true” – they probably are not good and not true. Know your rights as a consumer. And, do your homework and research and don’t be reticent about doing it yourself to protect your credit and improve your credit rating, score, and worthiness.

Picture Credit: Steven Millstein