Credit Report Repair Advice
Credit Repair Companies and Credit Counseling
By Jeanette Joy Fisher
Let's be crystal clear, right up front. Paying someone to "fix" your credit
is a waste of your time and money, since the negative issues that are
temporarily removed from your file will only reappear again in a couple of
Be careful with credit repair scams.
Most "credit repair" companies really don't help. In fact, you can improve
your credit more effectively on your own. By using credit repair companies,
you may also be opening yourself up to identity theft, unsolicited emails,
and direct mailings. Protect yourself; don't ever share your personal
information with strangers or give up your right to handle your own
financial affairs as you see fit.
Another important point: credit counselors only promise to get you out of
debt, not to improve your credit. Some companies will have you send them a
check every month, out of which they're supposed to pay your creditors for
you. However, some credit counselors will often pay your bills late, which
means that your credit report soon becomes filled with "over 30 days late"
notations and your credit score drops even lower than it was.
"Debt negotiators," posing as non-profit organizations, can ruin your credit
even further, advising you not to pay your credit card bills at all. They
also charge upfront fees, maintenance fees, and monthly fees, all of which
are supposed to be placed in a "trust" account. Then, after many months have
passed, debt negotiators finally convince creditors to settle for less money
than was owed, making yours an "uncollectible account."
That tactic not only ruins your credit, due to the many "over 90 days late"
remarks and collections notations, but all the money you supposedly saved --
which was actually money you owed -- will be considered as income by the IRS!
In other words, if you owed $20,000 and settled for $12,000, you'd be
required to list the $8,000 difference as income!
Credit repair companies promise to help clear up your credit problems. They
write letters to credit bureaus, stating that various listed information is
false, so the agencies will remove that information while they investigate
your account. During that time, the credit repair company sends you a clean
credit report, thereby giving you the false impression that you now have
good credit. But after you've paid off the credit repair company, you'll
discover that all the negative items will soon reappear on your report.
Remember: only incorrect items must be removed from your credit report if
they're proven to be false. If the black marks on your credit report are
correct, no one can have them removed, regardless of what credit repair
companies may try to tell you. Working with collectors to remove negative
remarks is possible, but thatís another article.
Some credit repair agencies can probably do a reputable job removing items
that are truly incorrect, such as: items after a bankruptcy that should have
been removed, double items, childrenís items on parentsí reports, and
paid-off items that still show past due. Some people really just don't like
dealing with this kind of thing, so a reputable credit restoration company
can help with these problems.
If you're seeking legitimate financial help to buy a home, the best place to
turn is to a mortgage broker. They're the ones who can offer you the best
FREE advice for settling credit disputes and problems, so when you find
yourself in difficulty, consider using a mortgage broker as your credit
(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.
Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy
to the Home, and other books teaches Real Estate Investing and Design
Psychology. For more articles, tips, reports, newsletters, and sales flyer
template, see http://www.doghousetodollhousefordollars.com/pages/5/index.htm
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