Lately credit repair companies around the country are getting hammered by the FTC and the Better Business Bureau. These companies are claiming that they can increase your credit score and remove collections from your credit report. The funny thing is they charge you up front before any services are rendered. The FTC states that credit repair companies are not suppose to collect money from you until the services have been rendered. This is not what is going on, along with the promises they make to remove stuff that you owe. So the question is what exactly does a credit repair company do? In this article I will discuss the facts and get through all the smoking mirrors that credit repair companies sell.

Can you remove collections?
The answer is you can only remove collections that are not yours by proof and collections that have been on your credit report for more than 7 years. No one can remove a collection on your credit report that you owe, unless it’s been over 7 years. Some collections report longer, but the standard is 7 years.

Can credit repair companies increase your credit score?
Credit repair companies can help you increase your credit score by requesting you do get a secured credit card. Most credit repair companies will require you to do this if you don’t have any good credit reporting. It was not the credit repair company that increased your credit score; it was the new secured credit card that starting reporting on your credit.

Can credit repair companies remove bankruptcies, judgments, and tax liens?
Credit repair companies cannot remove any of this, unless the bankruptcy has expired. Depending on what type of bankruptcy it was, it could be on your credit report up to 10 years. Judgments will stay on your credit report for 7 years from date of entry. Tax liens can remain on your credit report until paid.

By disputing collections you owe, does it remove them?
If you dispute a collection you owe, you are wasting your time. You are to only dispute inaccuracies on your credit report, disputing items you owe does nothing for you.

So the question is what exactly does credit repair companies do? I believe most of them are in business to just take your money. Some of these companies do provide good credit repair education, but if they tell you they can remove stuff you owe, they are lying to you. I have yet to meet someone that has gone to a so called credit repair company and have had success in getting there credit repaired. If you have credit issues on your credit report, you can repair your credit for free. The how to repair your own credit involves money management and the establishment of new credit if you have none. How to do this for free is on the web. You can go to the FTC and also our site blog as well.

This entry was posted on Thursday, July 17th, 2008 at 10:52 pm and is filed under credit education, credit repair agency, free credit score reports. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.