You need to repair your credit and are wondering if hiring a credit repair company is a wise choice?
Credit Repair is a legitimate business! In fact, a federal law called the Credit Repair Organizations Act regulates the credit repair activities credit repair organizations, companies, and agents. Use the information below and elsewhere on this site to learn more about the credit repair industry and then decide for yourself if you want to tackle repairing your own credit or if you should hire a professional credit repair company.
Up 1. Can credit repair companies do what they claim?
Yes! Legitimate credit repair companies do exist and the good ones really can do what they claim. The problem is there is too many so-called credit repair organizations that are nothing more than scams. They take your money, do nothing to improve your credit and usually leave you in worse shape than before you hired them. These rip offs give the entire credit repair industry a bad name. That's too bad because some people could really benefit by hiring the right credit repair organization.
The real secret to credit repair is having an accurate credit report. This means all information contained in your credit profile is correct and has not expired. However, most credit reports contain mistakes. Sometimes it is just a simple thing like an incorrect date or missing middle initial. But more often than not they contain major mistakes....mistakes that cost you credit score points.
Some of the things that can be reported inaccurately are:
- Late Payments
- Collection Actions
- Charge Offs
- Bankruptcy Actions
- Accounts closed by Grantor
- Judgements and Liens
- Lost/Stolen Credit Cards
- Settlement on Various Debts
- Vehicle Repossessions
- Bank Foreclosures
- Accounts placed in dispute
- General negative Information
- Wage garnishment actions
If any of the above items are being reported wrong, then having them corrected might have a positive impact on your credit score. However, none of the above information can be removed or changed unless it is outdated inaccurate! Negative information that is accurate cannot be removed . . . period!
Information where the statue of limitations has expired should be removed:
Up 2. Credit laws that apply to credit repair
Credit repair companies are regulated by a federal law called the Credit Repair Organizations Act. Agents use this law to legally repair your credit by forcing credit bureaus to remove inaccurate or outdated information from your credit report. They cannot get accurate and timely information removed - period! Credit Repair Organizations Act
If you decide to hire a credit repair company then you need to know that the Credit Repair Organizations Act clearly states credit repair agents:
- cannot require you to pay until they have completed promised services;
- cannot make false claims about their services;
- must, provide a copy of the Consumer Credit File Rights; before you sign a contract,
See Consumer Credit File Rights;
- must allow you three days to cancel the contract without paying any fees;
- must not perform any services until they have your signature on a written contract and have completed the three-day waiting period;
If there are errors in your credit reports, hiring a company can save you time, money and a lot of frustration, For a fee, good credit repair companies can "repair or clean up" your credit records just keep in mind they do not do anything that you can't do yourself.
Up 4. Additional credit protection information and laws