You do not need a Credit Services Organization to improve your credit, or to obtain a loan or extension of credit. Below are resources so that you can perform these services on your own.
Beware of companies promising a quick fix to repair your credit. Some credit repair companies use confusing and misleading claims to take advantage of those looking to improve their credit. These companies are required to follow federal and state laws including the Credit Repair Organizations Act and often the Telemarketing Sales Rule both of which prohibit credit repair organizations from using deceptive tactics and accepting upfront fees. Be on the lookout for these red flags:
- Demands for payment upfront: Under the Credit Services Organizations Act, a credit services organization cannot collect payment until they have completed the services they promised to perform. If the Telemarketing Sales Rule applies, the company cannot ask for payment until it has provided you with a credit report that shows the promised results and that report is generated more than 6 months after the results were promised. Don’t pay upfront.
- Sounds too good to be true: If you are promised a specific increase in your credit score, guaranteed results or that your credit can be repaired quickly, no one can do this. It will take time to repair your credit file.
- Can’t provide details: if the credit repair company cannot explain in detail what services they will perform for you and how much those services will cost, this may not be a reputable company.
- Provides you with incomplete or inaccurate information: If the company does not inform you of your rights to a written contract detailing the services to be performed, your rights to cancel the contract, or discourages you from contacting the credit reporting companies directly, you might not be dealing with a reputable company.
- Ask you to misrepresent information: If you are being asked to misrepresent information or to create a new credit identity by applying for and Employer Identification Number to use instead of a Social Security Number, you might not be dealing with a reputable company.
- Registration does not mean compliance: Issuance of a certificate of registration does not mean that the advertising or the business practices of a Credit Services Organization have been approved by the Department of Justice, nor mean that the business practices employed by the registrant are in compliance with California law, federal law, or the laws of any other state.