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The Credit Repair Organizations Act (CROA) is an Actthat was created in September of 1996 to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. CROA ensures that potential buyers of credit repair services are provided accurate information before making a purchase.
In general, CROA prohibits credit repair companies from displaying misleading or false advertising about their services. CROA also prohibits credit repair companies from demanding payment for services in advance, meaning the credit repair company must first provide work on behalf of the client before billing them. CROA also requires that credit repair companies provide their clients with a written contract outlining their services, as well as giving their clients the option to cancel their services.
On behalf of their customers, credit repair companies attempt to remove inaccurately reported negative items that can affect their customers’ credit reports and credit scores. For example, if someone was a victim of fraud in the past, or an insurance billing company failed to follow proper HIPAA protocols when reporting medical debt, then any negative items stemming from these situations could be considered inaccurate negative items, and could be removed.
According to the Credit Repair Organizations Act and the broader Consumer Credit Protection Act, which CROA is a part of, credit repair companies must conduct their business by following a strict set of rules. Under the Credit Repair Organizations Act, credit repair companies are prohibited from:
In addition to defining prohibited practices, CROA also states that credit repair organizations must be fully transparent about their services with all potential customers. Here is what credit repair organizations are obligated to provide under CROA:
Knowing your rights under CROA can be an effective tool for helping identify the difference between a legitimate credit repair organization and a credit repair scam.
Make sure you avoid any company that charges large upfront fees, advocates the creation of a “new” credit identity, or does not disclose your right to repair your credit yourself. Additionally, any credit repair service that promises to “Fix your credit within 30 days!” or “Raise your score by 100 points immediately!” or makes any similar claims is very likely a scam. One of the most obvious red flags of a credit repair company that doesn’t comply with CROA is the use of these kinds of claims to advertise their services.
It is important to note that if you do make the mistake of signing a contract with a credit repair company not following CROA, the contract may be considered void. If you are in such a situation, we encourage you to seek legal counsel.
Fast Credit Repair Solution strictly adheres to CROA by only charging for services after they have been performed and by utilizing your rights under a variety of consumer protection statutes, including the Fair Credit Reporting Act, to help you legally take action on your credit.
Anna Grozdanov was born in Sofia, Bulgaria but moved to Arizona with her family. Ms. Grozdanov grew up in Arizona and went on to graduate Magna Cum Laude from the University of Arizona with a B.A. in both Philosophy and Psychology. Ms. Grozdanov finished her first year of law school at Pepperdine University School of Law in California, but returned to Arizona where she graduated from the Sandra Day O’Connor College of Law. Since graduating from law school, Ms. Grozdanov has worked in Estate Planning, Estate Administration, Probate, and Personal Injury. She has extensive experience advising and working closely with clients and applies these skills at Fast Credit by helping clients achieve their credit repair goals. Ms. Grozdanov is licensed to practice law in Arizona. She is located in the Phoenix office.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
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