When you need to fix your credit, knowing the difference between legitimate companies and credit repair scams can help you save your time, money, and most important, your credit rating.
Say you’ve just obtained a copy of your credit report. You open it only to discover you don’t have a clue what’s going on in there. Not only is your score lower than you thought it was but the report itself is filled with terms and acronyms that make little to no sense at all. It’s like they deliberately try to make things as complex as possible, presenting a riddle with absolutely no clues to help you solve it.
So where are you to turn? Well, the obvious answer is one of those credit repair companies you keep seeing online. But there’s so many of them, and a lot of them are just scams anyway, right? How do you keep up with the people who say they’re trying to help you back up? In short, how can you tell the good from the bad (and the ugly)?
Four out of five experts agree: Credit repair reviews aren’t real
One of the things you might think would help you pick the right credit repair company is a review site. After all, the best way to research any product you’re thinking of getting for yourself is to see what others have said about it, right? So you search for credit repair company reviews to see which firm is really in it to help you back on track, and which is only there for the money.
Well, this may come as a complete shock, but all of those credit repair review sites are biased (in our experience anyway). Every single one. They’re either created and maintained by whichever company is ranked #1, or by an affiliate who gets paid everytime you sign up for their #1 choice. Now that’s going the extra mile to guarantee business!
You’re gonna like the way your credit looks – I guarantee it!
Speaking of guarantees, you’ll want to especially shy away from any company that promises to wipe out all of your bad credit at the drop of a dime. No one can guarantee you results when it comes to credit repair, no matter what a bunch of dots on a map or front page testimonials may say. Just because they all claim to be the #1-rated company in the business doesn’t mean they really are. Remember, we already established those reviews are bogus to begin with.
And while most reputable companies won’t make this claim, anyone saying they can completely wipe out your bad credit in a matter of days is outright lying. Credit repair can take months to work through, not days or even hours. Stay away from anyone who makes any promises beyond what they can legally accomplish.
“We didn’t see nothin’ if you didn’t”
Another general rule of thumb when it comes to dealing with credit repair companies is to gauge the emphasis they put on dispute letters. Unless you keep meticulous records, chances are a couple of items on your report won’t look familiar at all, so a credit repair company may be quick to suggest this as your first order of business for fixing your credit.
What some may not tell you though, is that disputing your trade lines is hardly the best way to repairing your credit. The credit bureaus may take some of these accounts off your report, but they could show up again in a few months time, and you’ll be right back to where you started. Except this time, your wallet may a bit lighter from those monthly fees the credit repair companies are hitting you with.
Make ‘em an offer they can’t refuse
A good way to avoid this type of runaround is to familiarize yourself with your state’s SOL (statute of limitations, not the other type of SOL) and laws, i.e., how long the original creditor has to collect on a particular account. Federal SOL is 7 years from the date of last activity on the account. However, each state’s SOL varies depending on the type of account (oral/written agreements, promissory notes, and open-ended accounts), with some lasting for only 2 years, while others follow you for 10 years.
So instead of allowing them to randomly send dispute letters to every negative account on your report (which is like throwing darts at a board, blind-folded) familiarize yourself with your state’s SOL and be prepared to work out payment plans with the creditors themselves.
Going all the way
Finally, while credit repair alone is a great thing to have, there are some companies that offer more than just putting a band aid on your credit history and calling it a day. Any credit repair company that offers debt relief services is worth looking into as well. Bad credit doesn’t happen overnight, and it won’t go away the next morning. Make sure you are able to work out payment plans with both the creditor and the debt settlement specialists so you can work towards reducing negative accounts within your means.
Keep an eye on your accounts, and anyone eyeing them for you, and within a few months time, your report will look cleaner, and you will have learned
