ShareThisDear Debt Adviser,
I understand that there are privately owned agencies that will clear your credit report for a flat-rate fee. From what I understand, it takes a few months, but they can re-establish excellent credit ratings for their clients. Are you familiar with them? How does this service work? Is it safe?
-- Eve
Dear Eve,
There is no tooth fairy, no magic cream that can remove fat while you eat all you want, no fountain of youth -- and there is no company that clears a bad credit report for you.
Companies that claim they can "erase" your bad credit have as their sole objective erasing money from your bank account. They are making false claims. Legitimate credit-repair companies are few and far between. They can advise you on actions to take to improve your credit and they can dispute inaccurate or out-of-date items in your credit report -- for a fee. However, you can do the work yourself and save the fees -- hundreds, sometimes thousands of dollars -- that you'd pay to the company.
Keep in mind that accurate information cannot legally be removed from your credit report. What you can do is dispute any information that was put into your report in error or which is in your report past the time the law says it must be removed. To do this, contact the credit bureau that reported it and file a dispute either in writing or online. The credit bureau then has 30 days to get back to you, either with proof that the item is legitimate or that it will be removed.
Don't feel that you are the last gullible lady in the USA who believes in supernatural credit intervention. You are not. Not by a long shot. In fact, the Credit Repair Organizations Act was designed for the large number of people who fall prey to credit-repair scams. It provides consumer protections requiring all credit-repair companies to give you a copy of "Consumer Credit File Rights Under State and Federal Law," a pamphlet that explains your rights in dealing with credit bureaus.
The act also stipulates that a credit-repair company cannot make false claims about their services, such as "erasing" bad credit. They must complete all promised services before you can be charged, must have a signed contract for services and must complete a three-day waiting period before they perform any services. That three-day waiting period allows you to cancel the contract with no obligation once your friends talk you out of it.
One shortcut used by some credit-repair companies to improve your score, known as "piggybacking," is no longer a viable solution because the latest FICO 08 score analytics identify and exclude those accounts. Piggybacking is the practice of paying someone to allow you to be an authorized user on the account of someone who has excellent credit. The authorized user would then benefit from the other unrelated account holder's credit history. Unfortunately, their bad credit also gets reported on your credit report. Like dating a creep, this has more negatives than I have space. But you get the idea.
A legitimate way to improve your credit score by using an authorized user account is being added to a spouse's or parent's account. These accounts will be included in your credit-score calculation and if the account is a positive, will add points to your score.
Additional steps to improve your credit include:
-- Make all payments on time and bring any open accounts current by paying any past-due amounts.
-- Keep your credit-card balances low, below 50 percent of credit limits.
-- Apply for new credit only if you need it. You may have to start with secured credit such as a secured credit card, a card account with cash that becomes the credit line. Or you could try a passbook savings loan, a loan using your savings as collateral.
In time, the positive information will outweigh the negative and your credit score will begin to improve. Just because there is no tooth fairy doesn't mean there isn't a credit fairy. A great site for more tips is www.creditfairy.org. It's by the Ad Council and has great information, especially in FAQs and links sections!
Good luck!
(Steve Bucci is president of Money Management International Financial Education Foundation. Visit www.moneymanagement.org for additional debt advice. If you have a question for Steve, e-mail debtadviser(at)bankrate.com. The Debt Adviser is a weekly feature of bankrate.com. For more stories, visit scrippsnews.com.)
THE DEBT ADVISERMust credit bankrate.com
You are right about one
You are right about one thing "Legitimate credit-repair companies are few and far between." I did my research on several of them after getting burned by Lex------law. I thought that they were the biggest that they would be the best. Wrong answer. The one thing I did learn was after that was to google "the company" and "complaints". This was a big help. I saw others experience and learned what I did not want to go through like paying a monthly fee. My research did find a few and I mean a few. The one that I felt most comfortable with "from what I read" was www.theonlylegalcreditrepair.com. But PLEASE do your research and don't put out a dime until you feel comfortable. My two cents.
Look at BBB reports.
I agree. Good companies are hard to find. If you are looking, be sure to look at BBB reports too. You can learn a lot about a compnay by the number of people that file these complaints. Go to www.bbb.org. Lex--- Law has about 300. That seems really high. Consider www.ovationcredit.com for some good information.
Credit misinformation is like cancer, and you are the cigarette
Mr. Debt Advisor,
I am happy to see that you have properly informed your readers about several concerns to be aware of within the credit repair industry and how to avoid the traps set by liars and thieves. I hope people will heed your warnings.
However, thankfully the part in your article about "piggybacking" no longer working with FICO 08 is completely untrue. Please correct this error in an effort to perpetuate the dissemination of accurate information about the already largely unknown credit scoring/reporting industry. Please visit these links to verify this:
- In the yellow section on the side bar: http://www.fairisaac.com/NR/exeres/E098C595-545F-4DDD-A6CF-449EA685E8E1,frameless.htm
- http://www.boostmyscore.net/index.html
- at the bottom of page 2 : http://www.boostmyscore.net/documents/CongressionalCommitteonFinancialServices-AuthorizedUserTradelinesLiveOn.pdf
Thank you for your time and consideration.
- Bill Airy - President & Founder, BoostMyScore.NET
303/295-2928
Credit Repair Revealed
It is true that you can repair your own credit. You could also defend yourself in court and give yourself a root canal, though I wouldn't advise any of the above.
If removing inaccurate or unverifiable items from someone's credit where as simple as mailing a dispute letter, why is it that 80-90% of credit reports have errors?
The truth of the matter is the credit bureaus PROFIT from mistakes on your credit report. Get ALL the facts at www.Credit-Repair-Revealed.com
Brian
http://www.Credit-Repair-Revealed.com
Lex----Law
I have been a member of Lex ---- Law for 2 years. I have continued with their service because they dispute issues on my credit report before they are on there 30 days. This is so important to my business because I require excellent credit to get the best rates on inventory loans especially with this cruddy economy. I think credit repair is a must for businesses.
Creditforgetit.com
I tried doing the credit thing myself and got roped into the whole free anual credit report thing that is anything but free.
I got lucky.
I found these guys on line and told me stuff I did not want to hear. The truth! No miracles of instant fixes.
I went to them and in 4 months, increased my score by 100 points.
I came in for a free consultation. They told me they would not speculate anything, that they had to view my report and then make their reservations.They sat me down and told me what they could do.
I was surprised to see that at the end of the consult, they had dispute letters done for me with copies and the postage was attached that they would mail out.
Then the fee....$100.00 set up and $29.99/month with NO CONTRACT for long term. Month to month contract until I was done. I got my credit restored for well under $300.00. These are my guys. I told them I would brag about them to who ever would listen...Thanks creditforgetit.com
Jodi
credit repair
http://www.sourceonecreditrepair.com/.....
1-888-440-2040 x 305
Hi I just read your question and think that this company will help. They helped me with my credit and the $35 a month (pay as you go) price was well worth it.
100% Money Back Guarantee
Source One Credit Repair's services are fully backed by our Money Back Guarantee. If we fail to provide services to you, as described in our service agreement for any month, you will not be billed for that month, and if your payment has been processed your payment will be refunded to you. policy.
Contact Bill Visel at
bill@sourceonecreditrepair.com
.OR YIM WVISEL
1-888-440-2040 x 305
FICO 2008
Authorized user still having an advantage, they just took off the "seasoned trade lines" business. Only if the authorized user and the primary card holder have the same address or are spouses or close relatives will get the benefit.
Credit repair scams? sure, there is plenty that's why we have a law specifically for that. The Credit Repair Organizations Act. It's so hard on credit repair companies that 99% of them are in non compliance in one way or another, specially in the "no payments in advance" part. They call it different names.. Set-up fee, commitment fee, deposit, monthly fee... They all want money before doing anything. That's against the law. The FTC makes a sweep once in a while taking down the worst of them
There is a new generation of credit repair companies designed with full CROA compliance in mind, the first to come on the market was Better Credit Reports Consulting at www.bcrconsulting.com. The client pays on a per account bases after every account gets deleted, to get started they only need to sign the CROA mandatory contract, no positive results, no payments.
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