How to hire a tradeline company: A Checklist
We have clients that come to us after bouncing around from different websites and after speaking with other companies. Quite often, they were misled. We hear about the different “incentives”, unrealistically low prices and credit “magic” other companies are offering. Sometimes, our curiosity gets the best of us and we check out the origin of these deceptive marketing campaigns; they never cease to amaze us.
We’ve put together a checklist, of sorts, for you to use when contemplating the hiring of a tradeline company. It’s more of a “road map” if you will. If you find it helpful, please share it with a friend or family.
Step 1: Reviews?
These days, all you need to do is pull up Google in a web browser and check their reviews (and make sure they’re real). Most of the time, they float right to the top. However, the more scrupulous “companies” are quick to change their names, start new websites, etc., and they’re not as easily found.
It’s important to note that reviews can be stuffed with fake testimonials. Use your head when reading reviews. If they look fake, they probably are. If not, they are probably real.
Step 2: Verify Business Records
At it’s shortest, it takes 10 minutes to build a website (not a good one, but you know what I mean). On the other hand, it’s much more time to consume, expensive and revealing to start a new business. Make sure the company you intend to use is a legitimate and an actively registered business in the State within which they claim to operate. Again, whip out the google machine and type in the state followed by “business record search”. From there, you should be able to find and navigate the State’s business records for a particular business.
Step 3: Do they have a website?
It’s not the end of the world if a company lacks a website, but… really? In 2021? You’re on the outskirts if you don’t have some form of internet presence. Aside from being culturally aloof, it does say something about a company. It takes responsibility, time, effort, money, etc., to maintain “internet real estate”. If I had to choose between a random Google voice number from craigslist and a site like ours… sorry, there’s no question; I’d go with the website. In addition to mere online presence; is the site secure? Does it have private members areas, does it function and make your life easier? If a company put this kind of time and effort into their site, they’re in it for the long haul.
Step 4: Trusts and Bonds
There is no federal requirement to maintain a trust account nor a bond. However, almost every state has this requirement if the company’s operation warrants it. You can check your State’s credit repair law (again by going to google and searching for them), and determine whether or not the tradeline company you’re considering is required to be bonded and/or operate a trust account. For example, does the company comply with State requirements if they exist?
Step 5: Agreements and CROA Compliance
No matter the State of operation, all “credit repair organizations” have to comply with certain requirements under the Credit Repair Organizations Act (yes, tradeline companies are “Credit Repair Organizations” under the act). For example, providing an agreement with a complete description of the services to be performed, providing you a Rights Statement pursuant to state and federal law, etc. Make sure you receive an agreement, in writing, before hiring a tradeline company.
There’s no bad way to verify a business. If you are trying, you are succeeding. We could have 100 steps, but we’ll stop here with a few closing comments.
Find out if, and how, the company protects your personal and private information. Do they care about your credit goals, or are they just looking to sell tradelines (did they analyze your credit report and make a recommendation)? Do they work with make-believe techniques like “credit sweeps, credit profile numbers (CPNs), etc.? Lastly, use your judgment.
We recently followed our own advice. We called all our competitors from the top to the bottom of Google to ask about their processes. There’s a ton of new companies out there learning the process. Many of these companies are still trying to learn the industry. So, here’s our bonus information:
- Don’t work with someone unless you can verify they’ve been doing this for at least 5 years. Tradelines are very complicated, so it is incredibly important to have experience in the industry. A lot of people (not just startups) that cut corners and do the wrong thing. Only time fixes this problem and 5 years is a good standard.
- Communicate with the company. You will know right away if you’re dealing with a legitimate company. In fact, you probably don’t need to do any further research. You’ll know.
Updated: November 15, 2021