The Truth About Credit Repair

by Guest Contributor · 10 comments

This is a guest post from Debt Lead, who has a debt consolidation website by Kimberly Credit Counseling.

Have you ever heard this before: “Credit Problems? No Problem.” “Your Bad Credit Erased…100% Guaranteed”?

Beware if you have ever read this type of advertisement. There are numerous companies throughout the United States that claim they can “fix” your credit reports for a fee. However, they do little and sometimes nothing in most cases to fix your credit reports. What ends up happening is these companies take your money and disappear with it and you’re left with the same “bad credit” and even less money. Many companies also claim that they can create a new credit file for you by getting you a “new” Social Security number. This is illegal and never actually works.

Your credit history is maintained by companies called credit bureaus. These are private companies that collect information reported to them by mortgage companies, banks, department stores and other creditors. These bureaus can legally report any accurate negative information for 7 years and bankruptcy information for 10 years. Any accurate negative items that are within the 7 (or 10) year reporting period cannot be erased from your report by anyone. This is true even for companies that advertise claiming they are able to “repair your credit”.

Time is the only way to heal your credit report. By making consecutive payments when they are due, you will be able to show a more positive rating on your report, but your negative marks will not be removed.

Steps to Check Your Credit
You are entitled by law to see any information that the credit bureaus have on file about you. To find out what is listed on your credit report, you can follow these simple steps:

  • Contact the local credit bureaus.
  • Obtain a copy of your credit report. There may be a small fee if you haven’t been denied credit within the last 30 days, during which time it is free.
  • You can visit the credit bureau office to review your credit report in person.
  • Look over the report and check for mistakes.

If you do not understand something, you can ask. By law, the credit bureaus are required to explain your report to you. If a mistake is found, notify the credit bureau of the mistake and provide them with as much information regarding that problem. A reinvestigation will be done to dispute the information (if legitimately incorrect) and all necessary corrections needed will be made. A corrected copy of your report should be sent to anyone who has received the incorrect version within the past 6 months.

Are You A Victim?
If you have ever encountered a serious problem with a credit repair company, you CAN report them. You can contact your local consumer affairs office or your state attorney general. Check with your local directory assistance to see if a toll-free number is available.

You can also contact the Federal Trade Commission (FTC) to report any situations. Although the Commission cannot rectify individual credit problems for the consumer, it can act against a company if they see a pattern of possible law violations. If you feel a company has engaged in credit fraud you can send complaints to:

Correspondence Branch
Federal Trade Commissions
Washington, DC 20580

Lastly, here’s one common myth about your credits that everyone asks so let’s clear this up right here.
Credit Clinics and/or Credit Repair Services can “clean up” your credit report.

No one can legally remove accurate information from a credit report. However, you can request a reinvestigation on any of the information in your file that you dispute as inaccurate or incomplete.

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{ read the comments below or add one }

  • Steven Millstein says:

    Excellent article. Credit repair is not an overnight process and requires time to see results. It can be very beneficial investing in a professional credit repair company to help speed up the process.

  • luis ortiz says:

    Credit Pros is a company that I used to fix my credit, they charge $50 for each deletion but it is well worth it. They deleted more than 80% of my negative items.

  • rosalyn Confused says:

    I just have a serious question about reading and understanding my credit report..I see multiple accounts from creditors that seem to charge me twice for the same services, on the same dates, on the same acct number. So am I being charged twice or not?? Anyone know the answer to this question..??

  • Chandler Locksmith says:

    Great. I just wonder if you can recommend some blogs or forums about open house sales and appraisals. By the way, nice article.

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  • magnesium says:

    Greg, I entirely agree with you. During all my life I do my best to avoid debts and use credit servises as less as possible.

  • Greg Robey says:

    The only real way to repair your credit is to pay off your creditors. I won’t even use debt consolidations services, they are just as bad as declaring bankruptcy for the purposes of getting a mortgage. Start a budget, line up your debt smallest to largest and start plugging away.

    Good Luck.

    • rosalyn Confused says:

      this was the best advice to me that I have read so far..We made the debt so we should pay it off..But should we call the account holders to see if they would except and thing like a settlement amount?? before paying the full amount??what do you think??

  • Ken says:

    Don’t forget about the credit repair companies that tell you not to pay you bill so they go into collections at which point they negotiate a settlement.

    That ruins your credit is very near sighted.

  • Emily @ Taking Charge says:

    You are not going to believe this, but the other day I was looking at the Austin Craigslist, and a guy put up an ad saying he repairs credit within 30 days and normally charges $400 for it, but that he’d trade his services with a woman who could give him “sensual massages” and other dirty things.. How awful is that…I feel terrible for any woman who does it. Anyway, I’m glad you posted this. People need to know that just like weight loss, there is not a quick fix for bad credit. You have to earn it.

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