Should You Pay a Company to Repair Your Credit?

An unhealthy credit record can be a barrier to buying a house or a car, and in some cases it can even keep you from getting a job, so it's important to do whatever you can to improve your credit rating. But you would be wise to ignore the claims of any company that says it can wipe your credit record clean. These "credit repair" companies offer:

Measures you can take yourself

Tactics that are a pure waste of your money

Strategies that can be downright illegalYou Can Do It Yourself

Some credit-repair companies will offer to get you a copy of your credit record and help you correct any errors contained there. And of course, you can expect to pay a fee for this service. The fact is that there is not need to pay anyone to help you with this because you can correct errors on your credit record yourself. Contact the credit bureaus directly to get copies of your credit reports, and make corrections or add explanatory statements yourself.

Other companies take a more questionable approach. They obtain your credit report and then simply challenge all the negative information contained there, whether or not it's accurate. These companies rely on the requirement under the federal Fair Credit Reporting Act (FCRA) that the credit bureau must investigate the challenged information and either verify the facts or delete the information from your credit file. But the FCRA does not require credit bureaus to investigate any claims that they believe are frivolous or irrelevant, and a letter that they receive that challenges every item in your credit report is almost certain to be considered frivolous. The money you pay to a company using this type of strategy (usually several hundred dollars or more) is simply wasted money.

The Wrong Side of the Law