Credit Cards

Reasons You Don’t Need a Credit Repair Company

Credit repair companies advertise that they can turn your credit around quickly and with little work on your part. While some credit repair agencies are reputable, many falsely advertise and mislead consumers into thinking they can fix it all for a fee. Before you hire a credit repair company, here are some reasons you shouldn’t and tips to take care of your credit on your own.

No one can change negative information that has been reported correctly

If something is on your credit report because you did it, it can’t be removed. Actual late payments, missed payments, bankruptcies, judgments, collections, and other negative information that is accurate has to just play its course. Most of that will not be gone for seven years or more regardless of what a credit repair company does.

The only thing a credit repair company can do to remove negative information is help you get rid of anything inaccurate. However, you can do that yourself for free! You just have to call or write the credit reporting bureaus to dispute it. According to the FTC, five percent of Americans have an error on their credit report. The credit reporting companies have an easy process in place to get things corrected without paying anyone to do it for you.

The only way to remove accurate negative information from your file is to wait until the item has expired

As I mentioned above, you can’t take away accurate negative information until it expires. That takes a long time. Anything on an active account will be there as long as you have the account, so if the record is really bad, close the account to start the process.

  • Late payments: 7 years
  • Bankruptcies: 7 years for Chapter 13 bankruptcies and 10 years for Chapter 7 bankruptcies
  • Foreclosures: 7 years
  • Collections: 7 years, depending on the age of the debt being collected
  • Public Record: 7 years. Unpaid tax liens remain for seven years after the payment is complete. Unpaid liens never expire.

You can repair your credit yourself for free by using sound credit practices

The only way to really fix your credit is doing everything right for the long haul. Make all of your payments on time and always pay at least the minimum. Keep credit card balances low. Make sure your accounts are open a long time to build a solid history.

There is no magic secret to a good credit score. I have gone through the dispute process to remove incorrect negative information from my report, I have never made a late payment, I pay off my credit cards in full each payday, and act responsibly when getting new credit and managing existing credit. If you do everything right for a long time, your score can only go up.

Understand what goes into your credit score

Make sure you understand how to fix your credit in the long term and know how your credit score is calculated. Also take advantage of the government program to get a free annual credit report (there is only one approved site to get it 100% free) and really free offers to get your credit score for free.

Questions on Credit?

Do you have any questions about fixing your credit score or credit report? I am happy to give you advice for free. Just send me a note through the contact form or in the comments below.

Image by StockMonkeys.com / flickr

7 thoughts on “Reasons You Don’t Need a Credit Repair Company”

  1. Jenny @ Frugal Guru Guide

    If mortgage rates drop much lower, we’re actually going to want to refinance, which will mean going head-to-head with a black mark we have over a clerical tax error we made about 8 years ago. (We owed nothing, but I entered ONE thing on the wrong line on the state form, and getting the money-hungry state to realize that, no, we weren’t going to pay all our taxes twice because of a typo took YEARS and repetitions of the same thing.) I’m sure that’ll be funfunFUN!

    1. It is tough to refinance today even with perfect credit, so that will be something you want to have documentation and support to show that it was not due to your being irresponsible (it sounds like you have a solid case).

      Were you ever able to get that issue resolved?

      1. Yup. They never even admitted their mistake. The amount owed just magically disappeared when they finally processed my paperwork instead of losing it. I’m hoping it won’t zombie back again…. We refinanced 2 years ago while (unbeknownst to us) they apparently still thought we owed them. If the rates keep dropping, it’ll be worth it again.

  2. My FI Journey

    Credit repair companies are just another way to scam people out of their money by offering what is essentially a non-service. I wouldn’t consider calling one unless my own attempts to repair true inaccuracies in my credit report failed.

    1. I totally agree! You can usually just handle it on your own with a little work and research. If you have real trouble, a lawyer might be a better use of your money.

  3. I use this place called Lexington and they did nothing other than what I had already done to fix errors on my credit report, unsuccessfully. I learned that millions of people are unable to get errors on their credit reports fixed. When a consumer complains, the bureaus simply confirm the same incorrect information with the creditors. And millions of consumers get stuck at this point, having no leverage to get the creditors to fix errors. 60 Minutes showed how their reporter, Steve Croft, got nowhere using the instructions in this article. Here is a solutions that works and how I got AMEX and Citicorp to change their errors after they refused. The leverage is with the creditors and using small claims court gets their attention every time and is very inexpensive. So I write a book about it
    http://disputeyourcreditreport.us/ebook

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