Credit Report Repair Schemes to Avoid
Credit scores and reports that go down the drain usually do so for a reason. Bad credit management and extreme debt can put a major dent in your credit report and take many years to salvage. People want fast fixes, and when they see a company claiming to have the ability to fix up a damaged credit report in a few days for a fee.
Know first of all that you and only you are responsible for the improvement of your credit report. You can find help and if you find yourself getting into troubled waters, the sooner you seek help, the better. This help comes in the form of credit counseling agencies, and can work with your creditors to lower payments as well as work with you to help you better manage your money. These credit counseling agencies are non-profit and require nothing from you. You should never have to pay a dime for help on your credit report.
The main scam by so-called “credit repair†companies does something the owner of the credit report can do his or herself. Your credit report contains a list of your actions such as late payments, on time payments, and so forth. Sometimes in a regular situation, a mistake can be made on your report. The credit repair company showers the three major credit bureaus (TransUnion, Experian, and Equifax) with requests to remove questionable items from your report. All items may be removed for a short time while under investigation, but as your report has been damaged by your own doing, they will soon be proven correct and again placed on your report. Essentially, the company has done nothing, even more so because you can easily dispute information on the report yourself.
The next scheme is actually illegal, so if you ever find a “company†that offers this or are approached by one, just say no. Your Social Security Number is used when you apply for new credit cards and also to help track credit information. The “repair†company tells you to apply for a Employer Identification Number, which coincidentally has 9 digits just like a Social Security Number. They claim you can then use this number to apply for credit cards and create a whole new credit history from scratch. Not only is doing so fraudulent behavior, but it will be quite obvious something is wrong when a fully grown adult has a brand new credit history.
There are some companies out there that claim they will pay your creditors for you. All you have to do is pay them and they will put the money into an escrow account, paying creditors from there. Not likely. The assertion is that the money in the account will grow to a sizable amount that can be used to pay off your debtors all at once. But with all that money sitting there, your creditors are growing more impatient for you to pay them and can increase interest rates in hopes of getting you to move more quickly, and in some cases if they are not getting their money back, they might seek legal action. You just went from a bad place to a worse place and the “repair†company still has your money.
Credit repair can only truly be repaired by reorganizing your spending, paying attention to your payments, and getting rid of your debt. It won’t be fast; repairing your credit report can take years, but if you want the benefits a good credit report can give you, it will be worth the work.