When you’re dealing with a poor credit score due to events like bankruptcy filing, it can be challenging to obtain a loan, mortgage or even secure a rental agreement. Many Canadians seek assistance in improving their scores through credit repair services. While there are reputable companies, others are more interested in taking advantage of individuals needing help. Here are some warning signs that a credit repair business might not have your best interests in mind.
Falsification of information
In Canada, you have the right to dispute incorrect information on your credit report. The credit bureaus—Equifax and TransUnion—are required to correct any inaccuracies. However, no legitimate company can remove accurate negative information. If a company suggests falsifying information or creating fraudulent documents to remove accurate items from your report, this is a significant red flag.
Guarantees of specific outcomes
The process of repairing credit is complex and can vary greatly depending on individual circumstances. Be cautious of companies that promise to improve your credit score by a specific number of points within a set timeframe. No company can guarantee specific results, and such promises are often misleading.
Upfront payment requests
In Canada, it’s a common red flag if a credit repair company asks for payment before rendering any services. Reputable companies typically do not charge fees until they have provided some level of service or achieved specific outcomes. Be aware of any business that demands upfront payment without demonstrating progress or results.
Lack of transparency and information
A trustworthy credit repair company will provide clear information about their services, costs and the expected time frame for results. They should also educate you on your rights and responsibilities as a consumer. Be wary of companies that are vague about these aspects or pressure you into making quick decisions.
By performing due diligence and researching potential companies, you can ensure you choose a service that is both ethical and effective. Remember, you also have the option to manage your credit repair efforts independently by obtaining your credit report, identifying errors and contacting creditors to resolve any inaccuracies. You can also seek legal guidance prior to making any debt relief decisions so that you understand your options and rights.
