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The Real Facts about Credit Repair Companies

By Janet Lacey
Published: Thursday, March 24th, 2011

“Start a new life and wipe away your bad credit history!”

“Legally make a new credit identity!”

You have seen these ads and you can see a lot of them coming. You may think it is inconceivable, but lets examine what is fact and myth in this situation.

The global financial crisis has triggered a nationwide credit problem. This is why there are a lot of credit repair companies offering their services.

Fact Number One

Yes it is very possible to repair your credit.

Myth Number One

It is not possible to wipe away your records.

By combining half truths, some credit repair companies victimized hapless people who have little or no knowledge at all about credit transactions. Only the CIA and the FBI can do the dirty job of obliterating your records. The best possible step that we can take is to review our records and correct inconsistencies and mistakes.

Fact Number Two

Credit repair companies and credit counsellors can really help you out. They can provide good services which really require expertise. Then you can pay them after you have seen the improvements on your credit score.

Myth Number Two

There are really some things that you can do yourself for free. Some credit repair companies do not tell you how easy it is to do things and that you yourself can do the job. They do not tell you your rights. They are just interested in making a profit from you.

What you can do about this is to know that you have a right to withhold payment if you do not see any result. When you are asked payment for a future service, do not pay in advance. Pay only after the service is done and you are satisfied with the results.

Fact Number 3

You can really dispute negative information in your credit report.

Myth Number 3

You cannot dispute accurate information.

Here are the warning signs that the credit repair company you hired is not reliable:

  • They say that you can dispute accurate information. If you do this you can be prosecuted.
  • They say that you can create a different identity so you can get credit. This is criminal activity.
  • They say that you cannot contact the credit reporting agency.
  • They make you pay in advance for their services.
  • They do not inform you of your rights.

If you see these signs, then don’t sign a contract with them.

A credible credit repair program usually follows these simple steps.

  1. Get a copy of your credit report and discuss with the repair company the items that you can dispute.
  2. Contact the credit reporting agencies with a dispute letter and all the needed supporting documents.
  3. Follow up on your case.
  4. Set up a program for you to be able to manage your finances well including scheduling your loan payments and saving up on your income.

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