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Money Management International
Improving Lives Through Financial Education
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Beware of Credit Repair Scams

It’s almost impossible to open your email or surf online without stumbling across ads to “repair your credit” or “fix your credit.”  Companies that pledge instant and remarkable improvements to your credit cannot deliver on their lofty promises. 
 
These days, with credit at a premium, families are suddenly finding that they may be rejected for credit cards, loans, and mortgages, and the temptation to pay for services to “fix” the problem on their credit report can certainly be enticing.   While there are steps that consumers can take to repair bad credit, all of these steps require little to no money, just time.  There’s usually no reason to pay someone to do these things for you, and no one can or should promise to improve your credit.  The majority of these credit repair company offers cost significant money, and they often are unable to deliver on their grand promises.
 
Furthermore, these “credit repair” companies often recommend or use fraudulent and illegal methods to repairing credit.  For example, some companies will send multiple credit disputes of negative (but accurate) records to the credit reporting agencies, claiming that information is incorrect, under the law that information must be verified as accurate within 30 days or should be removed from your record.  This is illegal–accurate, negative information should not be disputed, and this information can be added back to your record once it’s verified as accurate. 
 
Another fraudulent method is to recommend that you open a new social security number or employer identification number.  This is also illegal and fraudulent and definitely does not work. 
 
The FTC web site offers recommendations on how to recognize a credit repair scam.  Beware companies that require money up front and recommend that you do not contact credit agencies yourself, among other things.
 
Keep in mind that any legal, ethical method to repairing credit can be done by you, without any fee.  This includes sending a 100-word statement to the credit agencies, explaining your delinquencies, disputing any inaccurate information, and continuing to pay bills on time.

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