In this day and age, bad credit is one of the worst things that you can have when it comes to your financial health. With a poor credit score you will be stuck with high interest loans, that is if you can even get a loan. With a poor credit score you can find yourself spending thousands more in interest over time than you would if you had just okay credit. This has caused a massive influx in consumers flocking to credit repair services online to help fix their credit.
The problem with this is that shady companies out there have come out of the woodwork attempting to be your “knight in shining armor”. They attempt to charge you insane fees while providing very little if anything in return. In 1996, President Clinton and the federal government crafted an attempt to stop these practices by signing the Credit Report Organizations Act, or CROA, into law.
So just what is the Credit Report Organizations Act? The CROA is a subsection of the Consumer Credit Protection Act. It basically forces companies that officer credit repair services to be honest in their advertising and what they are offering. The goal of this act is and was to prevent companies from feeding you false promises that they were not able to complete. They now must only offer things that are actually possible to complete and that they are capable and qualified to provide.
It used to be a common practice for credit repair agencies to promise the result of having items removed from your credit report. They would charge thousands of dollars on this premise and not always live up to the guarantee. Since this is something that cannot be truly guaranteed, it is not an allowed practice anymore. You’ll also notice that these services now charge a monthly fee. This is another result of the CROA. Previously companies would charge a huge 1 time fee up front and then under deliver. Now it is illegal to do that which is why you see the monthly fees for ongoing service.
Another huge breakthrough with the CROA is that it requires all credit repair companies to notify their customers and potential customers up front that the services they provide can be executed by the consumer on their own. Consumers need to realize that credit repair is a process that can be done by the consumer themselves. The only reason you would hire a professional is if you don’t want to take the time to research, learn, and put in the work to do the process yourself. Completing all of this on your own can actually take years, whereas it could be a matter of months when using an agency. However, it’s important to know that you can do it on your own.
All in all the CROA has resulted in a much more positive experience for the consumer. No more worrying about insane up front fees or hidden fees. No more worrying about shady practices and under delivering. The consumer is more protected and real credit repair services are more obtainable for the average customer.