Can a credit repair company fix my bad credit report?
UPDATED: February 20, 2013
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There are indeed legitimate businesses out there that can help you clean up your credit record. Some will contact your creditors, try to consolidate your debts, and put together a repayment plan. They may be able to advise you on bankruptcy and whether your should consider it. Many are non-profit agencies who charge small or even no fees to provide credit counseling. You can locate agencies in your area under Credit & Debt Counseling Services in your yellow page directory. For more information on legitimate credit counselors go to National Foundation of Credit Counseling website.
None of these efforts will instantly repair bad credit. Only the passage of time and care on your part can repair past damage. Credit errors will be erased from your record in 7 years and bankruptcies in 10 years. A good track record in resolving problems and paying on time can improve your credit even more quickly than that.
Unfortunately, there are companies claiming instant cures that are actually scams. The signs of scam include:
- Asking you to pay for credit repair services before you've received any services from them;
- Not telling you what your legal rights are or what you can do for yourself without paying any fees;
- Advising you not to contact a credit reporting bureau directly;
- Advising you to create a new credit persona by using a new Employer Identification number instead of your Social Security number.
There are firms currently operating on the Internet that are selling "credit repair kits" for $20-130. The actions recommended in some of these materials are illegal (such as concealing your identity) and will only get you into more legal trouble and make your situation worse. Be careful and check out companies you work with thoroughly.