Credit Repair Agencies – Are They A Scam?

If you have a poor credit score or even just a credit history that makes lenders think twice about lending to you it is likely you have considered turning to a credit repair company. You can’t have failed to have noticed them if you have been going through a tough time financially, they are all over the place.

The big question is do they work? Can they actually help you to repair your credit rating? Or as some claim, are they just one big scam? In this article we are going to take a look at some of the claims that credit repair clinics make.

Now before we go any further let us get clear on the fact that there are basically two different types of credit repair agencies out there. The first type will claim to be able to help you fix your credit history by removing things such adverse information on your file such as bankruptcies whether you have been discharged or not.

The second type will make less startling claims and will just offer you help with getting incorrect information removed from your credit files.

Let us start by examining the second type of agency to begin with. They say that they can force the credit bureaux to remove anything which is incorrect and they will only charge you $X to do it.

The first thing to get straight is whether or not there is any incorrect or incomplete information actually on file. If there is, under the Fair Credit Reporting Act you can instigate a dispute with both the credit rating agency and the company who supplied the information.

They are both legally obliged to investigate your dispute and report back. If they don’t respond in a way that you find satisfactory you can demand that a summary explanation be added to the file allowing you to put your side of the story. This explanation has to be sent to everyone who requests your credit report under the Fair Credit Reporting Act.

The clinics can and will do all that for you at a price but the thing is you can do it all yourself and save the money. If you do decide to use a company to do it for you though be aware that they are not allowed to charge you until they have completed all the work on your behalf.

Let’s turn to the other clinics, the ones who make the outrageous claims.

If you are made bankrupt it happens under federal law. Do you think that the law makers would allow you to hide the fact that you’ve been a bankrupt just by paying some sleazy little agency? Bankruptcy is a very serious situation and it will stay on your record for 10 years because that is what the law states will happen.

In the highly unlikely event that it was removed what will happen when you make an application for finance that asks if you have ever been through a bankruptcy. Will you commit fraud by lying?