You have heard the ads before on late-night TV.
“We can take your credit score from a 500 to a 750 guaranteed.”
“We can get rid of bankruptcies and other negative items on your credit report.”
Really? So, what is really going on? If this were true, these companies would be solving a nationwide problem. However, it is not entirely true.
Credit Repair Companies don’t have a secret that you don’t know
It is a simple formula to improve your credit score. There are negative items that are on your credit report. Those negative items, by law, have a certain time period that they must remain on your report. Until that time period is served, it is almost impossible to get rid of them. If you have more bad than good on your report, your credit score is going to be lower.
You can do it yourself – you don’t need to pay someone
I write about everything that you need to know in my book Deceptive Money. It is a process anyone can manage. First, you take every item on your credit report and assign it to a correct, incorrect, or error category. The correct items (even though you might not like them), are serving their time period on your credit report. You just need to make a note of when they can be removed. The incorrect items are someone else’s information, and you need to dispute them and have them removed. Finally, the items that have an error need to be corrected. You only want the correct information on your report.
It all comes down to managing the information that is on your reports. No one will maintain that process better than you.
They do have one secret that gets them results……temporarily
The real aggressive ones will instruct you to dispute every negative item on your report…including negative items that are legit. Let’s say you have defaulted debt that is yours and should be on your report. If you dispute that information, the credit reporting agency has to verify the item. They have 30 days to complete this verification process. If the creditor doesn’t verify the item in those 30 days, the credit reporting agency must remove it. The creditor eventually verifies the debt is yours, and then the credit reporting agency puts it back on your report.
The intention of the credit reporting laws was not to afford you the opportunity to verify legit items in hopes that they fall through the system. Unfortunately, there are credit repair companies that request you lie about your information anyway. Besides the ethical implications, this process, at best, has information temporarily suppressed and not removed.
Bottom Line? Your credit score is not broken. Thus it does not need to be repaired. You can, however, improve your credit score and do it for free. This isn’t rocket science.