Credit Repair is a very debated topic on the net right now as to whether it's legal, effective, ethical and an avenue worth pursuing for individuals with negative, inaccurate or unverifiable information on their credit reports. No matter where you search, you will find varying opinions in regard the legitimacy of the credit repair industry, from the FTC and Attorney General, to debt consolidation companies and law firms practicing credit repair companies.



First off to answer the question "is credit repair and its practitioners legal," the answer is yes! There is a specific body of legislation, the Credit Repair Organizations Act (CROA) that outlines how credit repair companies may legally operate. This Federal regulation is proof that the industry as a whole is legal and not a scam. I think the negative overtones are more likely a case of a few hundred bad apples taking advantage of people.

The second most debated topic in many of the popular credit forums is whether or not one should even use a credit repair company, or give it a go themselves? The art of credit repair or credit restoration is not necessarily a difficult one to grasp and despite what a lot of the credit repair companies and lawyers would like you to believe, there is no "magical, proprietary dispute letter." Remember, the Fair Credit Reporting Act (FCRA) was set up so that consumers could fix errors on their credit reports on their own. It was not set up so consumers could fix errors If they had the magic letter. It really is almost as simple as saying...

"Hey this is not my account, please verify the information and remove from my report"

So why would you consider hiring a company to improve your credit score if it is so easy? The art of credit repair is not perfectly written letter, but more of knowing the little tricks credit bureaus and collection agents use to avoid eliminating the debt.

As much bad press credit repair agencies have received, bureaus and collection agencies are no angels either. They try and trick you, they don't always follow procedure and we've seen numerous cases of them breaking promises consumers have made with them when negotiating debt.

Credit report repair agencies should be well versed and know what to expect and exactly how to negotiate through all the little tricks that the average consumer wouldn't. If you are lucky enough to be working with an ethical company that does its job and at a good price, it can work wonders for your credit score.

The people we spoke with that do favor using an agency to fix their credit, do so because typically it's only 30.00 to 50.00 per month and they just don't feel like dealing with the headaches, nor do they want to be their own guinea pigs.

If you do make the decision you would rather leave it to the pros, what steps should you take to make sure you're hiring the right company? At the time of writing this there is very little governing the industry outside of CROA and it is a craps shoot for the most part.

However, there is hope on the horizon. Currently a non-profit organization is being formed called the National Credit Repair Association (NCRA) This industry organization brings overdue legitimacy and integrity to the credit repair field, and represents all certified credit repair organizations. The idea is that accredited credit repair firms are overseen to ensure they embody top standards and ethics, and adhere to all applicable state and federal laws in their practices. In other words, the "BBB" of the Credit Repair Industry.

We highly recommend that you utilize this service when fully launched as it will force legitimate companies to sign up much like they would the BBB and it will also weed out the unscrupulous credit repair companies who do not wish to adhere to standards. The credit repair industry is a legal and much needed industry, but much like any "new fad" it's going to take time to get regulated, weed out the scum and let the professionals rise to the top.

In closing, credit repair is something that most Americans will probably have to deal with at some point in their lives. It can be done by you with a little homework, accurate record keeping and patience, or you can hire a firm just as long as you've done your homework, insist the company is a member of The NCRA and make sure they are not breaking laws when dealing with your personal credit scores.