Credit Repair Organizations or CROs, can be a dangerous trap that often leaves your credit and your finances in a worse condition than when you first came to them.
Here at Auto Credit Express, weve been helping people find auto financing with bad credit and rebuild their credit since 1999. During that time, we have only found one magic bullet to credit worthiness, and that is hard work and time.
Thats why when we see yet another credit repair organizations advertise the impossible, to wipe out your bad credit in an instant, we shake our head and pray nobody falls for this wrong way to repair your credit
Beware the Credit Repair Scam
Any credit repair organization that promises you the impossible, a clean credit record overnight, is lying. The fact of the matter is though; it is illegal to remove accurate information from your credit report, negative or otherwise.
If your information is inaccurate, you are legally able to contact your creditor to have the item removed from your credit report still. This is according to the Fair Credit Reporting Act also known as FCRA, and we frequently advise all our customers to check for themselves that their information is accurate and up to date.
These shady credit repair organizations have been the target for the Federal Trade Commission due to the sheer number of complaints they generate. Far too many consumers today have fallen for this gimmick.
Typically, the process Credit Repair Organizations follow has three steps.
First, youre required to provide copies of your credit history from the three major credit bureaus.
Second, theyll point out questionable items that you should dispute.
Finally, the CRO says they will contact the creditors to challenge them on the disputed items.
However many people will find that their credit never improves. In fact, many may find themselves even further in debt after paying hundreds for a service that has now simply vanished, moved, or gone silent.
The worst part? The steps that the CRO supposedly follows are all steps that can easily be done yourself and should be done on a regular basis for free.
A Better Way
There are several legitimate methods you can use to handle your credit if it does ever become problematic. Try one of these instead of falling for this frequent trap.
Seek a Credit Counselor
Different from a Credit Repair Organization, a Credit Counselor will help guide you and show you what steps you need to take to repair your credit. They do not take the steps for you. Often, you can find these types of counselors free of charge.
Contact a Credit Consolidation Company
Perhaps you have no inaccurate marks on your credit report, but you do have several debts. A consolidation company can help you take several of your debts and turn it into one consolidated amount. Oftentimes, the agreed amount that you pay will be less than what your total debt was in the first place.
Take a Larger Role in Your Finances
Finally, be more active and aware of your finances and credit history. These should be places in your life that regularly receive your attention. This way you will notice the questionable items before it is too late.
There is no magic bullet to repair your credit over night. Part of our goal for the past two decades has been to help consumers like yourself become more self aware of your finances. Thats why we created our one of a kind application to help you find the best opportunities when you need to find financing for your next vehicle.
It only takes a few moments of your time to open the door to a better financial future; why not start now?
Department of Transportation (DOT) employees use government credit cards for cash advances at casinos and racetracks, according to a report by the Office of Inspector General (OIG).
Employees misused their government-issued travel cards in 2012, racking up $2.1 million in charges for personal items, and more than $180,000 in unauthorized cash advances while they were not on business trips.
The audit, released last week, examined the travel card program, which employees are authorized to use on hotels, transportation, and meals during government travel. The OIG found that the DOT does not have effective policies in place to prevent the government credit cards from being misused. In fact, the agency has no policy prohibiting employees from taking cash advances out at casinos.
“While reviewing cash advance transactions, we identified cash advances collected at casinos,” the OIG said. “While DOT’s Travel Card Policy does not preclude cardholders from taking cash advances at casinos, this presents another opportunity for abuse to occur.”
The OIG examined 218 cash advances that were taken at casinos, and found 27 were made by employees not on official travel.
In one example, a Federal Aviation Administration (FAA) employee collected $492 in cash advances from his government credit card at a casino in Shawnee, Okla.
A former OIG employee was also able to use his travel card, despite leaving the agency more than two years before. The employee cashed $488 out at casinos. In both instances the cash advances were repaid, and the OIG employee’s account has since been closed.
The cards are also used at racetracks. “Between October 2011 and June 2012, an FAA cardholder collected seven cash advances totaling $719 while not on Government travel,” the OIG said. “On one occasion, this employee obtained a $104 cash advance on a race day at an Alabama Superspeedway.”
In all, the OIG estimated that $183,000 in cash advances were improper, as they were not related to government travel.
The audit also found that government credit cards are used on personal items, such as groceries.
Cases cited by the OIG include a Federal Motor Carrier Safety Administration employee using his card for a $550 purchase at a recreational vehicle resort in Tampa, Fla., and an FAA employee making a “$97 supermarket purchase at a store located 18 miles from her residence.”
A total of $2.1 million of DOT travel credit card transactions were spent for employee’s personal use and unrelated to government business.
The DOT does not have adequate oversight over cash advances made through its travel card program. Government officials did not detect any of the 24 “excessive” cash advances identified by the OIG.
The agency has access to a system that tracks potential abuse of cash advances, but employees do not use it because “DOT’s Travel Management Policy does not require them to do so.”
“DOT has effective controls to prevent cardholders from making purchases at businesses that do not provide transportation, lodging, or meals and to minimize delinquent cardholder accounts,” the OIG said. “However, excessive or unauthorized cash advances and instances of travel card misuse are going undetected because DOT lacks robust internal controls to prevent these transactions.”
“Specifically, while DOT’s Travel Card Policy prohibits such misuse, it does not specifically require program officials to monitor for excessive cash advances, which increase the risk that cash advances are used for non-Government travel expenses,” they said.
The OIG concluded, “Until DOT takes the necessary actions to further strengthen controls, it will be unable to more effectively detect travel card misuse.”
Lynda Blackwell, manager of mortgage policy at the Financial Conduct Authority (FCA), told members of the Association of Short Term Lenders that they had concerns about firms trying to lend to the marginally credit worthy.
She said that while there was nothing fundamentally wrong with credit-impaired borrowers the highest priority must be that they can afford to pay back the money they had borrowed.
Blackwell said the FCA has made it clear that borrowers taking out bridging finance for credit repair with the expectation that it will act as a stepping stone to a mainstream term mortgage was too speculative to use as an exit route.
She said the mainstream mortgage lender must supply a guaranteed mortgage offer for it to be a credible means of repaying the bridge.
After the financial crisis, lenders moved away from remortgage lending to borrowers with an impaired credit background, those on low incomes or the self-employed, towards lower risk house purchase loans.
But this highly competitive, low profit margin market has quickly become saturated.
According to the FCA, the same number of active mortgage lenders (136) which were operating in the market before the crisis are still around today. That same number of lenders are chasing a market which is 50% smaller, 80% of which is controlled by the top six lenders.
Blackwell said this put pressure on the smaller lenders to grow their business and make a profit by turning to higher risk lending.
But she warned: Growth cannot come from allowing borrowers to self-certify their income, affordability can no longer be stretched on interest only where there is no viable way of repaying the mortgage and credit can no longer be extended so easily to marginally credit worthy borrowers who are going to struggle to repay.
Blackwell said a quick internet search had brought at least one regulated bridging firm which was promoting bridging finance for credit repair.
There are many responsible bridging lenders out there but Im afraid as with every market there are also the less scrupulous.
The firm that is still promoting credit repair and any others that we find doing similar things can expect to be contacted by us to ensure the website is corrected.