Are Credit Repair Companies Scams?
October 5, 2009
The credit repair service, or credit counseling service, in the USA has acquired some bad press over the past couple of years. This is because there were numerous cases of credit repair companies who have misled people and abused the trust of their clients.
This has lead to a backlash with numerous guides and tips cropping up everywhere to persuade people that you can repair your credit score on your own. The idea behind this is that most credit repair companies do little to improve your credit rating, instead, they rather focus on debt management counseling and debt reduction. This is a good thing, but not the same as improving your actual credit rating. In fact, if your credit repair company does not promptly make your debt repayments on time on your behalf, your credit rating could actually go down. So instead of doing the right things to raise your credit score, they are, in fact, influencing it negatively.
Some credit repair companies write letters to the credit bureaus claiming that the information in your credit report is wrong and that it must be corrected, with proof of the mistakes to follow after an investigation. The credit repair companies then remove these items from the credit reports and you get a clean bill of health, so to speak. However, the credit repair companies then never follow through with the proof and the negative items just return to your report later, leaving you with the false impression that your credit rating looks better than what it actually is.
But this does not mean that every credit repair company is a scam, some companies out there are giving a good service to their customers. These agencies are reputable and have built up a good name through the years, and will contest incorrect information on your report and act on your behalf, however, you have to realize that rebuilding your credit properly is only something that you, yourself can do by making debt repayments on time and ensuring that you do not default on payments.
It is always best to rather handle credit related issues yourself. This way you can make sure that your personal information is not compromised and that the best person with your interests at heart – yourself, is handling your credit rating yourself.
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