Credit repair is a way for you to work on your credit report by disputing unfavorable or inaccurate and outdated information in order to improve your credit score.
Credit repair agencies offer services to help you repair your credit score, but many of them are unfortunately scams. If a credit report agency promises you that they can erase all of the negative information off your credit report they are most likely not following the law (i.e. Credit Repair Organizations Act).
On their website, the FTC advises looking out for these warnings to spot credit repair scams:
- The company wants you to pay for services before they provide any services (Under the CROA, credit repair companies cannot require you to pay until they have completed the services they have promised).
- The company doesn't tell you your rights and what you can do for yourself for free.
- The company recommends that you do not contact any of the three major national credit reporting companies directly.
- The company tells you they can get rid of most or all the negative credit information in your credit report, even if that information is accurate and current.
- The company suggests that you try to invent a "new" credit identity — and then, a new credit report — by applying for an Employer Identification Number to use instead of your Social Security number.
- The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.
The fact is that there is no quick and easy way to fix your credit score. However, you can improve your credit report legitimately over time through conscious, consistent effort e.g. reporting inaccurate information and sticking to your personal debt repayment plan.
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