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Most Credit Repair Companies Are Bogus - And Other Dirty Little Credit Secrets



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By : Brandon Cornett    99 or more times read

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It is a sad state of affairs when companies prey on consumers who are in financial distress. But it's also nothing new. Take the foreclosure crisis, for example. With millions of Americans at risk of losing their homes, the number of foreclosure-prevention scams has skyrocketed.

But there is one industry that really takes the cake in the scams department, and that is credit repair industry. These companies are notorious for making bold promises about how they can clean up your credit report. But there are three things you need to know about them:

  1. You can clean up your own credit report, and for free.

  2. These companies cannot do anything that you can't do for yourself.

  3. These companies typically charge upfront fees, and for a very good reason. *


* They charge upfront fees because they know they cannot live up to the bold promises they make. But by the time you realize their services are worthless, you've already paid them!

According to the Federal Trade Commission: "The truth is, these companies can't deliver an improved credit report for you using the tactics they promote."

The FTC brings up a very important point. If you have negative but accurate information on your credit file, there is nothing these companies can do about it. Negative entries can follow you for 7 - 10 years, depending on the type of information it is. So don't believe the claims about "wiping the slate clean" ... it just doesn't work that way.

You Can Fix Your Own Credit Reports

Here's another dirty little secret of the credit repair industry. Statistically, you will not make major improvements to your credit score just by fixing errors on your reports. The best way to boost your score is by paying all of your bills on time, maintaining low balances on your credit card accounts, and generally using your credit wisely.

All of the improvement techniques listed above have one thing in common -- you have to do them for yourself. There is no credit repair company on the planet that can control your financial habits. You must make those changes for yourself. But it's not rocket science. It's actually one of the most straightforward topics in the realm of personal finance. These companies make it seem complicated so you'll think you need to pay for help. But you don't need hire help, and you'll be throwing your money away if your pursue it.

Consider Nonprofit Credit Counseling

If you do need guidance to get your finances on track, you'll be happy to know there are several nonprofit (and legitimate) credit counseling agencies in the United States. Most of them have been around for decades, and they do good work. The problem is that for every one of these companies, there are literally hundreds of credit repair scammers. So follow these tips to find legitimate help:

  1. Visit the U.S. Department of Justice website at USDOJ.gov.

  2. Do a website search for "nonprofit credit counseling".

  3. Use their database to find a local counselor in your area.


I hope you find this article helpful, and I wish you well in pursuing your financial goals.
Brandon Cornett has created one of the Internet's largest libraries of credit advice for home buyers. If you enjoyed the straight-shooting advice in this article, and you would like to read more of the same, please visit http://www.homebuyinginstitute.com/credit.php to learn more.

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