Credit Repair: Do I Pay A Business To Repair My Credit?


When your credit is low, it can be tempting to look for a quick fix. And if you switch to Google, you won’t run out of services that promise to optimize your credit report, boost your score, and pose as a better loan candidate (for a fee, of course).

Experts disagree. At best, so-called “credit repair” services will lighten your wallet to the tune of hundreds – if not thousands – of dollars by performing due diligence that you can easily do on your own for free. At worst, they will engage in unethical or even illegal activities. If their tips are discovered, those black marks will show up right on your credit report – and don’t even think about trying to get your money back.

“There are all kinds of services out there that claim to have ways of removing negative information,” says Andrew Pizor, an attorney at the National Consumer Law Center. But the only legitimate ‘fixes’ credit repair services can actually make – correct errors on your report or erase outdated information – may be taken care of by yourself.

One underhand tactic these companies employ is to bury the credit bureaus with a storm of letters disputing late payments and other negative information, in the hopes that a harassed employee will mistakenly delete them. Since letters disputing credit report information can be sent electronically or by post, these “repair” services have multiple fronts from which to launch their blitz.

Pizor says there are some issues with this practice. To begin with, bureaus are permitted under the Fair Credit Reporting Act to disregard letters that are not sent by the consumer. And even if their deluge of paper causes an office to incorrectly delete a negative item like an unpaid invoice sent to collections, they tend to catch their mistakes quickly. “Even if that happens, these articles tend to come back soon after. It doesn’t last, ”Pizor says.

Another tactic used by some “repair” services is to add your name to a credit account owned by someone else – a “business line” in industry parlance.

“I’d be careful with services that promise to improve your score by adding business lines,” says Bruce McClary, spokesperson for the nonprofit. National Foundation for Credit Counseling (NFCC). “There is a legal way to do it, but… if the shortcuts are cut and the laws broken, you could be just as liable as the service provider,” he warns.

The Experian credit bureau uses even stronger language: “Buying commercial lines may be viewed as deceptive by lenders and credit reporting agencies, and could even put you at risk of committing bank fraud,” the company said.

It IS legal for family members to add you as an authorized user to one of their credit cards or lines of credit – which is a good way to improve your score if you have very little money. credit history, according to Pizor.

“If your family wants to take a risk on you, it’s legal,” he says.

Still, Pizor cautions, if that family member fails to make a credit payment on time, it will affect both of your scores.

“Any misinformation on the primary user’s account is likely to adversely affect the authorized user’s score,” he says.

There are other ways to improve your score without the help of sneaky “fix” services.

Start by checking your credit report for incorrect information and file a dispute yourself. (If you do this, the FTC recommends send a letter to the credit bureau by certified mail so that you have proof that the company received it.)

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If all goes well, you can also seek help from a non-profit organization to increase your score. The NFCC has a program called Sharpen your financial focus to help people improve their credit profile. While not an instant fix, it works: Ohio State University studied the program and found that, after a year and a half, lenders were more willing to extend credit to people who completed the program.

There are also two new services that give you “extra credit” for good financial practices in areas that are not traditionally covered by credit scoring models.

In early 2019, the Experian credit bureau launched Experience boost, a free service that lets you include utility bills, telecommunications, and streaming service charges in the picture lenders get of your track record. Users see an average increase in their credit score of 13 points, according to Experian. In the same year, credit score developer FICO launched a new scoring model called UltraFICO, which incorporates bank account activity into a user’s score. These services are especially useful for people with very little credit history.

“Improving your credit isn’t something you can fix overnight,” says Joanne Gaskin, vice president of scores and analysis at FICO. “But making a plan of action and taking the right steps with healthy habits can help you get there. “

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