September 19, 2017
 
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The Trouble with Credit Repair Services

The advertisements come in all forms—TV and radio, in the newspapers, on the internet, and even telemarketing calls, offering their professional, personal credit repair services. For those with bad credit histories and scores, these ads, and others like them, are very tempting:

Credit problems? No problem!”

“We can erase your bad credit—100% guaranteed.”

“Derogatory items removed from your credit report!”

“Only $49 per month—credit cards accepted!”

“We can remove bankruptcies, judgments, liens, and bad loans from your credit forever!”

How They Work

Claiming they’ll fix your bad credit, credit repair companies can be very misleading to vulnerable consumers. In many cases, these firms take your money while doing little or nothing to improve your credit report. Other companies may even offer illegal ways to provide you with a new, clean credit record, which can land you in jail. Either way, customers will be required to pay a monthly fee, or the fees can be based on the number of items disputed or deleted. Remember, an item disputed doesn’t mean it will be removed. The fees can really add up over time, plus, you’ll be saddled with another monthly bill to add to your list of expenses, without getting anything really significant in return. The underlying basis for the scams is that these firms convince you that they will do something for you that you cannot do for yourself, for free. They may also encourage you not to contact any of the credit reporting bureaus directly and they’ll require payment before any services are rendered. Here are some of their empty promises:

 

·        Remove all negative information

·        Erase bad credit

·        Create a new identity

·     ·        Provide a new tax identification number

·     ·        Provide a new Social Security Number


The Truth

The truth is that there is no quick and easy fix to correct a poor
credit history. Only time and good bill paying and borrowing practices will improve your credit history. Anything a credit repair company can do for you legally, you can do for yourself at little or no cost. No one can legally remove accurate, yet negative information. The Fair Credit Reporting Act entitles consumers to a free copy of their credit report every year, or if/when you’ve been denied credit. There is a legal process consumers can take in order to dispute mistakes or remove outdated information—at no cost.

 

By law, credit repair companies must provide clients with a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign an agreement. They must also give you a written contract that spells out your rights and obligations. In addition, under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they promised.


The Answer

Know that just because you have poor credit doesn’t mean you won’t be able to get credit. Don’t believe everything a credit repair service tells you. If you’re serious about improving your credit, it can definitely be done on your own, or with help. If you’re feeling overwhelmed and need help maintaining a budget, repaying creditors, and keeping track of your bills, consider contacting a
credit counseling organization, such as Christian Credit Counselors. An honest, non-profit organization like them can work with you to solve your credit problems in an honest, professional manner, and provide you with the tools and materials to be successful. 

 

 

 

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