Cleaning up your credit report can cost you big if you are not careful. Gene Schwalen, CEO of S&S Private Capital and S.O.S. – Score Optimization Systems, wants consumers to be aware of a few red flags in order to avoid these scams.

Banks have tremendously tightened lending guidelines and increased credit score requirements, making it more and more difficult to qualify for a home loan and other financial solutions. With consumers looking for assistance in meeting the stricter loan requirements, many companies have jumped into the credit repair arena, taking advantage of those with poor credit scores. S&S Private Capital along with its Score Optimization Systems puts consumers in the “know” by giving them a few questions to ask and red flags to look for to avoid falling into credit repair traps.

Question #1: Does your company write letters on my behalf hoping information being disputed is not verified within 30 days?

Most credit repair companies will claim they can “legally” remove negative items from a consumers credit report, which is possible if done correctly! However, most companies utilize only one small piece of the Federal Fair Credit Reporting Act (FCRA) which states any information that is “unverifiable” information must be removed.

Therefore, these companies only write letters disputing the validity of the negative information in hopes the credit reporting agencies do not verify the information or the creditor does not respond within 30 days. This process is very unsuccessful, and even worse, the claims are fraudulent, putting consumers at risk since letters are written on behalf of the consumer as if the consumer had written the letters themselves. Additionally, any information that is removed is only removed temporarily in most cases. These type of dispute letters can also leave damaging consumer statements on a credit report that banks look upon unfavorably when making a decision on a loan application, which can lead to an automatic denial of your home loan.

Question #2: How much does your service cost?

A majority of credit repair companies will charge a one time “flat fee” for every client or a small initial investment and a monthly charge for their services. Though the price tag may seem very appealing, you definitely “get what you pay for”! Any company that charges every client the same exact fee, whether it is all up front or monthly, is only writing the type of letters described above. The very reason they are able to charge everyone the same fee is because there is no real cost to produce these letters, other than someone sitting at a computer copying and pasting template letters, and the price of a few stamps. Every consumer’s credit file is different. Therefore, the cost to do the job successfully will vary.

Question #3: What are the guarantees? If any…

Many companies throw out guarantees such as reaching a particular credit scores and delivering results in a very short period of time. Though a lot of these guarantees sound great, consumers need to be very careful. It is very difficult to guarantee any relatively short period of time to complete a client’s credit file. There are many factors and variables that credit repair companies cannot control. The credit repair process, if done correctly, will take time. Make sure all guarantees are in writing! For a Guaranteed Home Loan Approval, check out Score Optimization Systems and the Guaranteed Loan Approval Program provided, in writing, to each client.

Know Your Rights.

All credit repair companies are required to provide a services agreement which outlines the scope of work and expectations for services, a disclosure statement containing the consumer’s rights, and a cancellation notice allowing the consumer to cancel the contract for any reason within three business days from the date of the contract, for a full refund. If a company fails to provide an individual with all three documents, they are not following federal and state regulations.

S.O.S. will provide a free credit report analysis and consultation and help create the best plan of action necessary in order to accomplish your financial goals.

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