Why Consumers in California Should be Careful when Choosing Credit Repair Companies

A lot of California residents need credit repair. However, Gold State consumers should be careful about choosing credit repair companies.

Recently, the Consumer Financial Protection Bureau (CFPB) took action against four credit repair companies operating in California. Prime Credit, IMC Capital, Commercial Credit Consultants, and Park View Law (once known as Prime Law Experts) were fined more than $2 million. All of these companies were accused by the CFPB of allegedly committing illegal actions against consumers. Unfortunately, these are not the first credit repair companies in California to find themselves in trouble. There are shady “credit pros” all over the Golden State. However, there are also reputable credit repair services available to Golden State residents. When looking for a credit repair company to fix your credit reports, you just have to exercise caution.

How these Four Credit Repair Companies in California Allegedly Mislead Consumers

Targeting consumers in California who were turned down for mortgages and refinancing, these companies signed on thousands of individuals who wanted better credit. Then, they apparently proceeded to commit illegal actions against these consumers. According to the CFPB, these were the top three offenses committed by these four credit repair agencies.

They charged Southern California consumers advance fees.

Federal law prohibits credit repair companies from collecting fees before the delivery of agreed-upon services. Yet, the agencies in question ignored this law and made their customers pay money up front. They charged clients a fee for reviewing their credit reports, as well as an additional set-up fee to start service. Then, California consumers who signed up for these credit repair programs paid, on average, around $89.99 a month.

Their “money-back guarantees” were misleading.

All four of these companies claimed to offer a money-back guarantee, but under very misleading terms. For example, customers had to pay for at least six months of service before they could request money back, but this was not clearly stated in contracts.

They lied to customers about the benefits of their services.

A lot of Californians who wanted clean credit signed up with these companies because of the claims they made. They told consumers that all of their negative credit report items would disappear. They also promised consumers substantial increases in their credit scores, but these credit repair companies couldn’t back up their claims with actual proof.

Thankfully, the CFPB caught these companies and fined them. The individuals who owned these agencies also sold them and removed themselves from credit repair altogether. Unfortunately, there are still a lot of disreputable credit repair companies operating in California. Of course, there are also good credit repair companies out there that provide valuable services to their clients. Luckily, for California residents, there are ways to spot the differences between the two types of agencies.

How to Find Good Credit Repair Companies in California

California consumers who want clean credit reports should maintain realistic expectations when looking for professional credit repair. Never trust companies that claim they can remove all of the negative items from your credit reports. Legitimate negative credit report items stay there until they expire, and good credit repair services only promise the removal of mistakes and errors.

Next, look for customer reviews on credit repair sites. Check for recent reviews written by real people. It’s also a good idea to check the company’s Better Business Bureau Rating. Then, make sure to ask for a written and signed contract from your chosen credit pros. This contract should outline all of the work they intend to do.

Finally, don’t offer payment upfront, and look elsewhere for service if an agency demands payment in advance. You should also walk away if a credit repair company advises you to do anything that seems suspicious, or, even worse, illegal.

Free Legal Assistance with Credit Report Errors and Mistakes

Sometimes creditors and credit reporting agencies don’t cooperate with consumers and credit repair companies. When this happens, California residents with credit reports damaged by inaccuracies need legal muscle. The experts at Credit Repair Lawyers of America know how to handle creditors and credit reporting agencies, and we don’t take “no” for an answer. By contacting our firm, you get the best credit repair lawyers who will fix your credit, no matter what it takes – for FREE.

Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? The law allows us to collect our fees and costs from the defendants in any successful action.  This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (916) 438-9400 or sending him a message through our contact page.