Credit Repair
The term “credit repair” may sound like a long and tedious process, and depending on your financial standing and credit score, it indeed can take a while to get yourself out of the hole, but with the right repayment plan, dedication and effort, you
can repair your credit.
Credit repair services can be found most anywhere, and are a dime a dozen. Many promise complete and easy debt fixes and erasure of all bad credit instantly. Some even claim to be able to remove bankruptcy filings. Chances are, these promises are partly (or completely) scams. Any credit repairer who tells you they can quickly and painlessly free you of all your financial woes is telling porkies.
What’s more, they may use fear tactics into pressuring you into a quick “sale”, but the truth is anything they can do for you, you can do for yourself at little to no cost.
DIY Credit Repair and Repair Services
Basic credit repair steps you should take before seeking help:
- Obtain your most recent credit report (more info)
- Examine your credit reports for accuracy
- Challenge every erroneous item with the Credit Bureaus (sample dispute letter)
- Pay any past due amounts first
- Lower all credit accounts back under their limit
A complete checklist on do-it-yourself credit repair here
Still need to hire an expert? A legitimate credit repairer’s contract should include:
- The payment terms for services, including the total cost
- A detailed description of the services the company will perform
- How long it will take to achieve the result
- Any guarantees the company offer
- The company’s name and business address
Beware of scams. Red-flags to look for according to the official FTC website:
- The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they have promised.
- The company doesn’t tell you your rights and what you can do for yourself for free.
- The company recommends that you do not contact any of the three major national credit reporting companies directly.
- The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
- The company suggests that you try to invent a “new” credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
- The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
Remember, it is illegal for any credit repairer to tamper with or lie about your credit report information. They must explain to you your rights and how you can deal with your financial issue yourself. You should never ever create a completely new identity, which is a sign of a fraudulent debt manager. Also, any credit counselor who tells you to not deal directly with the three major credit companies yourself (Equifax, Experian, and TransUnion) is up to no good.
Helpful Links
Visit our
How Can I Fix My Credit Report page for a step-by-step guide
Additional information: