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Watch Out For Certain Credit Repair Services

Jun 5, 2008
Credit repair services claim to erase your bad credit and even create a new legit credit identity for you. While many companies do help to improve your credit rating with a financial strategy, there are many others waiting to take your money out of your pocket.

These repair clinics do this by challenging every item in a credit file -- negative, positive, or neutral -- with the hope of overwhelming the credit bureau into removing information without verifying it.

Credit bureaus are aware of this tactic and often dismiss these challenges on the ground that they are frivolous, a right that credit bureaus have under the Fair Credit Reporting Act.

Credit repair companies promise to help clear up your credit problems. They write letters to credit bureaus, stating that various listed information is false, so the agencies will remove that information while they investigate your account.

These services allow you to start building good credit and eliminate the past bad financial records that you have. Depending on your current credit situation, you may need to search for a credit repair company specializing solely in credit report repair or one that can also provide a full catalog of credit repair services. Your repair has never been more important.

Bad credit repair services have been around forever. In a previous generation, low budget commercials featuring local businesses that specialized in bad credit repair services were commonplace on late night television.

Bad credit can prevent you from getting the money that you need for home repairs or a new car. It can also cost you more money due to high interest rates. Bad credit score will cost you more in paying your insurance premium. That's why you need to improve it if you do not have good credit score.

Debt consolidation companies are able to reduce your total debt through debt settlement, wherein the creditor agrees to finish off the debt at lesser value than you actually owe to him.

Debt expirations do vary, as well as judgements status. If you have delinquencies, bankruptcy and charge-offs that are effectng your credit-scoring, credit repair is your best option.

Simply because most Home Equity Loans get you deeper in debt and once you are obligated you will find the problem is more complicated than when you applied for the loan.

Lenders often target home owners with financial difficulties offering them high interest rates and making them believe it is a solution for debt relief. Simply put, you can't live the "Good Life" if your credit is bad.

Legally, you're only allowed to dispute credit records. Unless you have proof that your creditor goofed, or your creditor is feeling generous, you're probably out of luck.

Legally, the onus is on the credit bureau to document anything on your credit report - if they cannot document it within 30 days, it must be removed. This is the basic strategy of many credit repair companies that charge exorbitant fees: challenge everything negative.

Lenders use that information to determine how much interest they will charge you on a loan or worse, they can turn you down. You can take steps to correct or remove inaccurate information from your credit record.

Lenders have been known to lower minimum payments for a few months or defer payments all together to help borrowers get back on their feet. This is only effective if you call them before you get behind.
About the Author
Gregory Wadel
Credit Repair and Debt Help
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