Credit repair agencies can be very tempting, as many of them promise to correct past errors and improve your credit rating almost overnight. But as with most things in life, if it seems too good to be true, more than likely it is. These companies make their living by capitalizing on the financial predicaments of their customers, and they know that the people who seek out their services often do so out of desperation. While there are reputable credit repair services out there, you must be careful not to get lured in by a wolf in sheep’s clothing.
The first step any individual should take is to thoroughly review your credit report and make sure it does not contain any errors. Here are some things to look out for:
- A single item appearing multiple times
- An item that is decades old
- An item that is not applicable to you but rather to someone with a similar name
Try fixing it yourself
If you discover any of the types of errors listed above, you can take action to correct your credit report without hiring a third party. Contacting the credit bureaus directly to dispute the misinformation will take time and persistence, but will pay off if you successfully complete the dispute process. If you do not have the time or ability, however, you can hire a lawyer or credit repair agency to perform the dispute on your behalf. It is important to note that you cannot dispute negative items on your report that are accurate.
What to look for in a repair service
If you find that you need to hire a credit repair company, there are certain things you should avoid. First, be wary of any company that promises to fix your problems overnight. Also steer clear of companies that employ illegal tactics to fix your credit. They may attempt to hide your credit history by having you apply for an Employer Identification Number that can be used in place of your Social Security Number when applying for credit. Or they could try to sell you a new Social Security Number. These are scams that can result in hefty fines or even jail time, so they should be avoided at all costs.
You should also avoid any company that asks for money prior to performing services, fails to inform you of your rights, advises you not to contact credit reporting agencies yourself, or doesn’t provide you with a written contract outlining their services and fees.
Be sure to fully research any company before you agree to let them handle your case. This includes checking their reviews with the Better Business Bureau and Consumer Protection Agency. A reputable credit repair company will start by reviewing your credit reports from each of the three major credit reporting agencies and will take steps to remove inaccurate items. They may even have the ability to negotiate settlements or reduced and more flexible repayments with your creditors. It will take money and time, but a good credit repair service can help get you on the path to improving your credit scores and making you more credit worthy.
For more financial tips, visit the Cliffco Mortgage Bankers Know-How Center today.