Most people only begin thinking about credit repair when they want to access more credit. The problem with trying to fix bad credit on such a short deadline is that in your haste to get started you risk potentially falling for a credit repair scam.
If you've been on the internet for any length of time you've no doubt seen ads claiming that for one low price company will remove the negative information from your credit report and restore your credit practically overnight. They may even be promising to wipe your past problems away and let you start over with a clean slate.
These companies are called credit repair companies. They often claim to be able to help you fix bad credit and there are certainly many reputable companies around willing to work with you on a longer-term goal to get you out of debt and out of the vicious credit cycle.
However there are also credit repair companies available who make their money by taking yours and returning very little in the way of helping you fix your credit problems. Many are under investigation by various State Attorney General offices and the Federal Trade Commission.
Credit scams are rampant so it pays to protect you and your family against being stung by understanding how some of these organizations operate.
What many of these companies will do in the name of fixing your credit problems is request that a credit bureau removes inaccurate negative information from your credit report. It's sounds complicated and involved, but in reality this is a simple procedure you're able to do yourself with much less hassle and expense.
You may also find that some credit repair companies will try to persuade you to register a new Social Security number. They'll tell you how you'll have brand new credit quickly and easily, but they won't tell you that this tactic is illegal.
When considering paying any company for debt or credit repair assistance, here are some things to watch for:
- Read the contract. Make sure the contract states the exact cost of the procedure and how long it's going to take. Also, look for a statement that gives you the right to cancel the contract within three days of signing it.
- Don't pay up front. If a company demands payment for services it has not provided this could be a sign that they plan to take your money and run.
- Don't sign your rights away. Some companies may ask you to sign a form waiving your rights under the Credit Repair Organizations Act. Don't do it.
- Creating a new identity is illegal. You might come across a company that claims it can create you a new social security number or employer identification number. Even if they can, this is illegal and could get you into a whole world of trouble.
- Know your rights. The company should furnish you with a statement explaining your right to obtain a copy of your credit report and challenge any inaccurate information in it yourself.
If you want to fix your credit without using a credit repair company, the first step you should take is to obtain a credit report from the three credit bureaus. Under federal law, you're entitled to at least one free copy of your credit report per year. Once you have your report, carefully examine it and make sure all your account data matches your records. If it doesn't, dispute any erroneous information using the supplied dispute form.
Each credit bureau has different dispute procedures but they generally involve writing to the bureau and specifying the information you want investigated. Remember, the bureaus are only able to remove listings that are inaccurate or unverifiable. I suggest mailing dispute forms via certified mail in order to document your requests to correct any creditor or credit bureau errors.
If you decide to use a credit repair company, take some time to research your options. Watch out for quick fix claims and think carefully about which company to hire. Remember that credit repair takes time to work, regardless of whether there's bad data on your credit report or not, so choose a company that is willing to work with you to achieve positive results without the scam element.
For additional information and warnings on debt repair scams see the National Foundation for Credit Counseling (NFCC) a non-profit organization that promotes financial responsibility and financial counseling, or the Association of Independent Consumer Credit Counseling Agencies (aiccca.org) and visit the Federal Trade Commission and read Fiscal Fitness
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If you've been on the internet for any length of time you've no doubt seen ads claiming that for one low price company will remove the negative information from your credit report and restore your credit practically overnight. They may even be promising to wipe your past problems away and let you start over with a clean slate.
These companies are called credit repair companies. They often claim to be able to help you fix bad credit and there are certainly many reputable companies around willing to work with you on a longer-term goal to get you out of debt and out of the vicious credit cycle.
However there are also credit repair companies available who make their money by taking yours and returning very little in the way of helping you fix your credit problems. Many are under investigation by various State Attorney General offices and the Federal Trade Commission.
Credit scams are rampant so it pays to protect you and your family against being stung by understanding how some of these organizations operate.
What many of these companies will do in the name of fixing your credit problems is request that a credit bureau removes inaccurate negative information from your credit report. It's sounds complicated and involved, but in reality this is a simple procedure you're able to do yourself with much less hassle and expense.
You may also find that some credit repair companies will try to persuade you to register a new Social Security number. They'll tell you how you'll have brand new credit quickly and easily, but they won't tell you that this tactic is illegal.
When considering paying any company for debt or credit repair assistance, here are some things to watch for:
- Read the contract. Make sure the contract states the exact cost of the procedure and how long it's going to take. Also, look for a statement that gives you the right to cancel the contract within three days of signing it.
- Don't pay up front. If a company demands payment for services it has not provided this could be a sign that they plan to take your money and run.
- Don't sign your rights away. Some companies may ask you to sign a form waiving your rights under the Credit Repair Organizations Act. Don't do it.
- Creating a new identity is illegal. You might come across a company that claims it can create you a new social security number or employer identification number. Even if they can, this is illegal and could get you into a whole world of trouble.
- Know your rights. The company should furnish you with a statement explaining your right to obtain a copy of your credit report and challenge any inaccurate information in it yourself.
If you want to fix your credit without using a credit repair company, the first step you should take is to obtain a credit report from the three credit bureaus. Under federal law, you're entitled to at least one free copy of your credit report per year. Once you have your report, carefully examine it and make sure all your account data matches your records. If it doesn't, dispute any erroneous information using the supplied dispute form.
Each credit bureau has different dispute procedures but they generally involve writing to the bureau and specifying the information you want investigated. Remember, the bureaus are only able to remove listings that are inaccurate or unverifiable. I suggest mailing dispute forms via certified mail in order to document your requests to correct any creditor or credit bureau errors.
If you decide to use a credit repair company, take some time to research your options. Watch out for quick fix claims and think carefully about which company to hire. Remember that credit repair takes time to work, regardless of whether there's bad data on your credit report or not, so choose a company that is willing to work with you to achieve positive results without the scam element.
For additional information and warnings on debt repair scams see the National Foundation for Credit Counseling (NFCC) a non-profit organization that promotes financial responsibility and financial counseling, or the Association of Independent Consumer Credit Counseling Agencies (aiccca.org) and visit the Federal Trade Commission and read Fiscal Fitness
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Credit repair is definitely a long term proposition and anyone who thinks they can see a difference overnight is delusional or has been sold a bill of goods by a rip-off credit repair company. Sadly most of these companies can't perform even half of what they promise. It really comes down to the old "if it's too good to be true" adage. I've been able to get my score back into the mid-700's (from the low 600's), but it took a couple years of diligent work to make it happen.