It’s absolutely true. "Credit repair services can't do anything for you that you can't do for yourself, free." Credit repair services don't have any secret remedies for erasing bad credit. However, the quality ones will have hours and hours of experience. Through trial and error, they know what works.
You can find some of the same information online, but usually scattered in different places. You can do all of the research and prepare all the letters yourself, but at what cost? If you haven’t put in at least 40-50 hours of research, then you probably are not ready to begin. When it comes to your credit file, many times you only have one shot. You can actually end up damaging your credit even more and making it irreparable.
I think of it kind of like representing yourself in court – sure you can represent yourself, but wouldn’t you rather have the best attorney in town represent you? It really all depends on how important it is to you.
Credit repair services have a pretty bad reputation, so when you chose one, be extra careful. Pick one that is reputable. If a credit repair service offers guarantees within the Fair Credit Reporting Act then it's doing its job. However, if they make promises of removing accurate information – it’s just not possible and you should avoid doing business with them.
Know your rights. Credit repair services must follow specific guidelines from the Credit Repair Organizations Act, which are intended to protect consumers. You should receive an explanation of these rights before signing a written contract. Read them.
You should receive a contract with all of the following information:
- The payment terms for services, including their total cost
- A detailed description of the services to be performed
- How long it will take to achieve the results
- Any guarantees they offer
- The company's name and business address
Remember the grace period. The credit repair company cannot perform any services for you until you've signed a written contract and completed a three-day waiting period. You may cancel the contract without paying any fees during this period.
Check out the Top 10 Credit Repair Services online. If you prefer to repair your credit on your own, check out the solid advice given in the Credit Secrets Bible - by far the best book I have read about credit repair.
Actually, paying off old debt can be very damaging to your credit scores. By paying on a charge off or collection account, you bring the account current, but it 's still negative. It will be listed as a "paid collection", but now instead of being say, 2 or 3 years old, it now looks like a brand new negative account, which will lower your scores drastically. And will take 7 more years to fall off your report. Instead of 4 or 5.
In fact, if you don't get the creditor to agree to a "pay for delete" BEFORE you pay it, they will almost never remove it and hurts your scores more than if you didn't pay it at all. It's a glitch in the FICO scoring system.
Chane is right on the pay off at a discount idea.
You want to be very careful with that because it is an example of potentially doing more harm than good.
Thanks Chane, Good post!