We’ve talked about credit repair reviews before, but understanding the legality is critical in paving your way to a higher credit score. Credit repair, in and of itself, is a perfectly legal means of building up damaged credit and restoring your credit score over time. Combined with proper payments and budgeting, it can completely turn around a falling credit score. Why then, are people concerned with legal credit repair?
The answer lies in the businesses that try to sell illegal means of credit repair and ultimately scam their customers out of precious time and money. We’re going to look at the best legal credit repair services and how to avoid potential scams from other, less reputable companies.
The Top 4 Legal Credit Repair Agencies
Among all of the legal credit repair agencies, we have compiled our top three companies for your consideration:
1. Lexington Law
Our first company is one of the most recognizable law firms in the country. With an entire team of lawyers and paralegals at their disposal, this licensed and bonded law firm has all the experience and the knowledge you need at your side for successful credit repair.
One of the best aspects of Lexington Law is the fact that they work with both your creditors and the credit bureaus. By targeting both of these institutions, they can make a lot more progress towards getting items removed from your report than the competition.
The only real downside to Lexington Law, is their lack of a money-back guarantee. Otherwise, they follow all of the credit laws to the letter. They even provide you access to their blog that has tons of posts meant to educate consumers on credit laws and positive spending habits.
While their prices are in the higher tier, Lexington Law is an excellent option for legal credit repair.
2. Sky Blue Credit Repair
We talk a lot about Sky Blue Credit Repair reviews here on DebtSteps, and that’s because they are an incredible option that provides both speed and value. While you’re required to pull your own credit reports, Sky Blue Credit only charges $59 per month for their services.
This is one of the lowest rates in the industry, and part of that is a result of them only dealing with credit bureaus and not creditors directly. Even so, they promise to send 5 disputes each month to all three of the main credit bureaus: Experian, Equifax, and TransUnion.
This comes out to a whopping 15 disputes per month for each of their customers! Since credit repair can take some time, it’s important to get disputes quickly sent, because the bureaus have up to 45-days to respond in some cases.
CreditRepair.com is a great option for people who want all of the possible features and benefits included with credit repair. The company has a lot of information available to its customers that can be used to learn more about credit and finances.
In terms of their customer service, our results were great with phone contact, but our emails often went unseen. That being said, the information we were given was factual and comparable to what we found during our own research.
The high number of educational topics, combined with a steadily updated blog, made this a great place to learn more about the industry and how to build a better future for your credit.
CreditRepair.com is one of the more expensive companies you can choose from, but they do offer a couple’s discount for the first payment. The employees here do pull your reports for you, but it’s an extra $14.99 this one time. There are no additional fees, but they do not offer a money-back guarantee.
The features they offer more than make up for these small pitfalls. The ability to monitor your credit at any time with their 24/7 Credit Monitoring, for example, is a great feature.
Their focus on education and helping you build a better future for your credit is also very admirable. It instills the right habits and knowledge into their customers so they can go confidently into the future.
They also have an excellent app that allows you to consistently access your credit repair status so you’re always in the loop. It’s for these reasons, and for the rigid approach to legal credit repair that the company takes, that we recommend them highly.
They take pride in providing a service that is fully functional and focuses on giving you very little to do beyond learn about how you can improve your credit’s future.
4. The Credit People
The Credit People is a credit repair service that offers a very simple and streamlined approach to credit restoration. They do this, while also offering one of the lowest pricing models we’ve seen. They start by pulling your credit reports for you and work diligently on your particular case.
The prices here are awesome, with only $59 per month being the cost you need to pay for what they do. If you and your significant other decide to sign up at the same time, you can enjoy a couple’s discount that earns you $20 off your first month’s payment for a total savings of $40 between both people.
The Credit People do not charge anything to pull your reports for you, and include this in the setup costs. There are no additional fees once you’ve paid the setup costs. From there, the standard monthly cost applies.
They also offer a money-back guarantee, which instills confidence in their services. As a company that obeys all of the credit laws, we highly recommend The Credit People as well. Next, let’s take a look at some of the signs you can watch out for when trying to find an option for legal credit repair.
How to Avoid Potential Credit Repair Scams
When your credit is suffering, many other aspects of your life suffer as well. You’re unable to make larger purchases like a house or car, and even your credit cards will become unusable. It puts a lot of stress and pressure on you to fix something that doesn’t have a quick and simple solution.
At this point, it’s easy for scammers to target you as prey for their false credit repair. They know you want things to get better quickly, so they’ll make promises they can’t keep to lure you in. Let’s take a look at how credit repair scams work and what to look out for so you don’t fall into their trap.
Signs of Illegal Credit Repair Scams
Credit repair fraud is very real, and it’s all around us. When you’re shopping around for the right firm, look out for these signs that the company is a scam:
- They insist that you pay before any work has been completed
- They forbid you from contacting the credit bureaus directly
- The firm wants you to dispute everything on your report, regardless of its authenticity
- They tell you to give false information on your credit card applications
- Finally, they don’t explain your legal rights to you and what they do
These are all major warnings signs, but then you’ll see companies that make promises like a clean slate or a new identity. How does this work, and is it legal? The answer is no, but the way they go about it may surprise you.
Companies Promising a “New Identity”: What’s the Catch?
There are scams out there that promise you a new lease on your credit. They give you an option that guarantees a new report cleaned entirely of your previous errors or mistakes. Sounds too good to be true? That’s because it is.
These companies give you a nine-digit number that resembles a Social Security number, but it’s not your own. That will explain that this is a CPN which can stand for a “credit privacy number” or a “credit profile number.”
In some cases, they may even ask you to apply for an Employer Identification Number from the Internal Revenue Service, otherwise known as an EIN. These numbers are legitimate, but they are not used for credit purposes. Instead, they are supposed to give businesses an identification under which they can report financial information to the Social Security Administration and the IRS.
The bottom line here is that an EIN is not a substitute for your Social Security number, but that’s what some credit repair scams will have you do. Once you obtained either an EIN or a CPN, credit repair scams will then tell you to apply for credit using this false number.
This would be used instead of your actual Social Security number, which is a huge red flag. They will probably try to tell you that this process is legal, but it is absolutely not. If you’re not using an EIN, the CPN they provide you is most commonly a stolen Social Security number that they’ve sold you.
Often these fake CPNs are taken from children or people who won’t immediately know that their identity has been stolen. By participating in these scams, not only are you being taken for your money, but you’re also participating in identity theft.
During your time with a fraudulent credit repair company, you may commit a federal crime or more than one when you do these things based on their advice:
- You lie on a credit or loan application using the false information they gave you
- You misrepresent your Social Security number by using an EIN or CPN
- You requested an EIN from the IRS under false pretenses
Despite being swindled by a credit repair scam, you could also face time in prison as a result of their poor advice.
What are Your Credit Repair Rights?
There’s a law called the Credit Repair Organization Act (CROA) that protects you from credit repair scams like the ones outlined above. This law provides you with certain rights through the Federal Trade Commission. They are as follows:
- A written contract outlining your legal rights and the services the credit repair firm will perform
- Your right to cancel within three days at no charge
- How long they expect to take until you see results
- The total cost of their services
- Any and all guarantees they have
If you find yourself denied of these rights in any way, you can seek damages in court, along with the money you paid them. If you pursue a class action lawsuit with others, you can also have your attorney’s fees paid by the company.
If you see credit repair fraud happening, you can report it to the state Attorney General in your area, or directly to the FTC, but keep in mind that the FTC cannot take direct action against the company unless they have evidence of a pattern where the company is violating credit laws.
Here at DebtSteps, we are focused on providing you the best legal credit repair reviews from companies that you can trust. Check out our other reviews today for a look at all of your potential options for repairing and restoring your credit!