Credit report repair services promise miracles, but often leave people with bad credit in an even worse position. If you need to repair your credit, and choose the wrong service to help you, you can end up paying the company and keeping your low credit rating. If you decide not to fix your credit score yourself, make sure that you check out the credit score repair company that you pick before you pay them, sign a contract, or give them access to your personal information.
Credit Repair Scams - Common Signs of a Swindle
Credit repair scams abound on the Internet. There are so many companies that are offering to help you repair your credit, and they all look the same. How can you tell which ones are just out to take your money? Here are some common signs of a scam.
- Upfront fees - If the company that says they can fix your credit wants you to pay a fee up-front, before they take any action on your behalf, it is probably a scam.
- Promises, promises - If the credit repair company tells you that they can remove current and accurate negative items from your report, or change your 500 credit score into a 700 credit score overnight, it's a scam.
- Bad Advice - If the company that you hire to repair your credit report tells you to try to get around your bad credit by creating a new identity or disputing accurate information, do not follow this advice. "They told me to" is not a valid defense in federal court, which is where you might be headed if you follow this extremely bad (and illegal) advice.
Read more about the signs of a credit repair scam at the Federal Trade Commission's website on Credit Repair.
Can You Repair Your Own Credit?
In reality, these services can't do anything to fix your credit that you can't do yourself. All U.S. consumers are entitled to a free credit report from each of the three major credit reporting bureaus every year. Once you have your credit report, read through it carefully to find incorrect or outdated items that may be affecting your credit score. Send a letter to dispute any errors that you find, to improve your credit rating.
Credit Report Repair Service - Are They Worth It?
Is a repair service worth the money you will pay to improve your scores? Probably not, since you can repair your own credit just as easily. If you keep your eye out for scams, however, a professional service can help you manage your debts and navigate the tricky process of restoring your credit score.
Updated April 2011
Victoria Nicks - Victoria Nicks has a Master's Degree in IT, and extensive hands-on experience with various types of hardware and software.
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