Turning to credit repair services sound like a good way out, if you can’t stand the consequences of bad credit rating. Through their ads, credit repair companies promise “quick fixes”, for a fee, to clean up your credit report. But, are credit repair agencies really worth the fees?
Federal Trade Commission received complaints from consumers who had lost money due to credit repair scams. The consumers paid hundreds or thousands of dollars in fees but got no improvement in their credit ratings. They reported that credit repair companies couldn’t deliver what they had promised.
These credit repair agencies will give the impression that they are doing things you can’t do it yourself. Even though there are some situations where these companies do deliver in many cases you can repair your credit by yourself.
How Credit Repair Services Work
Credit repair services ask your credit report from the credit reporting agency, and then to launch many challenges to the report in writing.
The main idea is not to find any mistake on your credit report. They just take advantage of credit reporting agency’s legal obligation to respond all requests for investigations in 30 days. If the agency doesn’t respond to you in that time, which is unlikely if you challenge multiple items, they must remove the item in question from your credit report.
While this may initially seem like a clever strategy, there is nothing to prevent the credit reporting agency from putting the removed items back to your credit report once they find the proper documentation.
For some reasons credit bureaus might not be able to produce the documentation in 30 days and have to remove something. But once they find the documentation the item will be restored to your credit report.
Credit Repair Companies and Your Rights
If you do want to use a credit repair company be sure to avoid any scams. It is essential that you understand your rights and obligations, which is written in the contract. Take some time to look over all the paperwork and fine print provided and read carefully before you sign anything.
The contract must contain
- the detailed of all promised services to be performed,
- all fees and the payment terms,
- any guarantee offered,
- when you will receive the results.
In many cases, depends on how complicated your situation is, a credit repair company should not be necessary. With the right guidance you can repair your credit report yourself. And the only time you should use one is if they are truly able to do services you can’t do on your own.