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Almost
everyone has some kind of debt. Most people have credit cards,
student loans, a mortgage, or car payments. Your timeliness
in paying off these loans make up your credit history, something
that people usually don’t think about until it’s
too late and you are declined on an application. Your credit
history is an important tool in maintaining your financial stability,
and can have a big impact on your way of life. Once your credit
rating is listed as “poor,” you will have a hard
time renting a car, putting a deposit on a service, or getting
a credit card. If you have bad credit, it is important to begin
working toward credit repair right away, before you find that
the damage gets worse.
Many people find the thought
of improving their credit history to be daunting, and might
understandably be tempted by a company online that offers to
quickly fix their bad credit for a price. Though there are situations
where one of these credit repair companies may prove useful,
in most situations they are unnecessary.
Credit repair companies aren’t
a realistic solution for most people, because they provide you
with a service that you are able to do perfectly well on your
own. These credit repair companies will have you obtain a copy
of your current credit report from a credit-reporting agency.
They will then launch an attack on each of the negative items
on your report, in writing. They don’t do this with the
idea that you have many mistakes on your credit report, but
in the attempt to take advantage of the credit reporting agency’s
legal obligation to respond to all investigation requests within
30 days. In effect, the credit repair company is gambling. If
the credit reporting agency fails to respond within the specified
time period (difficult to do if you multiple items are challenged
at once) they are required to remove the challenged item (or
items) from your credit report.
This may seem clever, but it is important
to remember that the credit reporting agency can put the items
they removed from your credit report right back on once have
the correct documentation. You could end up paying the credit
repair company to perform a “service” that was undone
a month or two later.
Aside from this strategy that some credit
repair companies use, many more companies like this regularly
scam their customers. Remember that these companies, by law,
must render all promised services before they accept your payment.
They must also clearly outline every fee and service that they
intend to provide. If you do choose to enlist the services of
a credit repair company, read over all paperwork and fine print
to avoid possible scams.
For most people, using the services of a
credit repair company isn’t necessary. Make sure that
if you do decide to use one, that you check them out completely
and that they are actually able to perform a service that you
can't, or don't have the inclination to do on your own.
This
website contains free information on choosing a credit repair
company.
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