Home: Free credit report :: credit repair businesses, financial service

Credit Repair Businesses: Why It's a Good Idea to Stay Away

"We fix your bad credit!" or "We improve your bad credit!" are just some of the promises we hear in commercials promoting the services of credit repair businesses, also known as credit repair organizations or credit repair clinics. However, financial service experts warn that more and more of these entities are popping up with no goal in mind other than to defraud consumers of the money they would be better off allocating for their debt repayment funds.

Credit repair businesses typically promise to delete any and all negative information in a credit report, "to your satisfaction" -- for a hefty fee. Usually, they require that half of the payment be made before service is rendered, and the balance given after the so-called service has been performed satisfactorily. They charge about $500 for an individual and $700 for a couple. That's quite a sum for many people.

According to Eileen Harrington, deputy director of the U.S. Federal Trade Commission's Bureau of Consumer Protection, this is money wasted by consumers in most cases. It's a fact that no one, not even credit repair companies, can legally erase bad information in a person's credit report if it is true, accurate, and timely. And because negative information can stay in a credit report for seven years (ten years for bankruptcies), it's no wonder that many people fall for empty promises about cleaning up their credit report quickly and easily.

If a person does have inaccurate or unverifiable negative information in his or her report, financial service experts advise them to take the necessary corrective measures without having to hire a credit repair clinic. Doing so will not only help them avoid becoming victims of fraud, but it's cost-effective as well because it involves only a small cost -- or none at all. If you do decide to use a credit repair business, remember that the only things they are able to help erase from your report are data that are inaccurate or erroneous -- nothing else.

Fraudulent credit repair businesses are being targeted by the FTC and other U.S. government agencies for their unethical and illegal practices. In fact, many of their numbers have been charged, prosecuted, and even shut down. The sad thing is these companies' victims have largely been unable to recover the money that they paid for so-called bad credit improvement service. Don't be one of them.