Looking Into Credit Repair Guarantees and Warranties

Posted 7/6/2010 4:30:02 PM in Credit Repair Companies
Credit repair is never a sure thing. Even if you exercise every legal right available to you ranging from submitting credit bureau disputes to suing your creditors, there is no guarantee that you disputes will produce results or that you will prevail in court. Sometimes it doesn't matter what you do, a negative item will remain on your credit report for 7 to 10 years.

It is because of this fact, and the apparent biases against credit repair companies, that the FTC frowns on overly aggressive messaging from credit repair companies and is so quick to point out that you can remove "accurate" negative information from your credit reports (accurate is in quotes because case law has essentially defined accurate as meaning negative item you cannot get the credit bureaus to delete). Companies that too strongly imply that their credit repair services will definitely be able to delete negative information from your credit reports risk FTC sanctions for misleading advertising.

Credit repair companies know that you want to be reassured that you are going to get your money's worth when you sign up with them. So while they will usually state that there is no guarantee that their service will produce the credit score you desire, many credit repair companies will also offer warranties where you can get your money back or have free service if you do not see results.
Something you need to be aware of before you select a credit repair company, however, is that many of these warranties come with restrictions and strings attached that you definitely don't want to learn about too late. Before enrolling with a credit repair company, make sure to thoroughly read the service contract paying special attention to the details surrounding the warranty. You may be surprised at what you find.
  1. You may void all warranties by not promptly forwarding updated credit reports and other communications to the credit repair company. This makes sense because the credit repair company will need to be kept current on the status of your credit accounts in order to best do their job, but you'll need to be careful. Even if you do not see results after many months of promptly sending in updates, you may forfeit any refunds by slacking off at the end.

  2. You may have to wait up to 12 months before you are eligible for a refund. Credit repair can take time and a credit repair company can request that you give them enough of it to complete the job. Make sure you are aware of any such restrictions so you don't cancel prematurely and sacrifice your chance at getting any money back.

  3. Your definition of improving your credit may be different from that of the credit repair companies. Some credit repair companies claim they will pay you many thousands of dollars if they are not able to improve your credit. When you look at their contracts, improving your credit merely means that they are able to remove at least one negative item from your credit reports which may or may not have much impact on your credit score and likely won't be enough to accomplish your credit goals.

Because there is a chance that a credit repair company will not be able to help you, just like there is a chance that you will not be able to reach your goals when working to repair your own credit, the option to get your hard earned money back is alluring. Just make sure you know exactly what you are agreeing to and aren't one of the unlucky few who find out the hard way.