Choosing a Credit Repair Service

Here are a few tips to assist you when looking for a quality credit repair company.

If you have a poor credit rating, be watchful of companies that promise to “clean up” your credit for a fee.  If a company claims it can erase your bad credit, don’t believe them.  The truth is, they can’t deliver.  After you pay them hundreds or thousands of dollars in up-front fees, these companies do nothing to improve your credit report.  Worse, many simply vanish with your money.

Credit repair companies such as these advertise in newspapers, on television and radio and on the Internet.  You may even get calls from telemarketers or receive fliers in the mail offering credit repair services.  But ignore their claims and beware of companies that:

  • Want you to pay for credit repair services before any services are provided;
  • Do not tell you your legal rights and what you can do yourself for free;
  • Recommend that you not contact a credit bureau directly;
  • Suggest that you try to invent a “new” credit report by applying for an Employer Identification Number to use instead of your Social Security Number; or
  • Advise you to dispute all information in your credit report or take any action that seems illegal, such as creating a new credit identity. If you follow illegal advice and commit fraud, you may be subject to prosecution.

You could be charged and prosecuted for mail or wire fraud if you use the mail or telephone to apply for credit and provide false information. It’s a federal crime to make false statements on a loan or credit application, to misrepresent your Social Security Number, and to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.

Under the federal Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the promised services.